Is your verbal promise legally binding?
Many small business owners take pride in the strength of their word. After all, building strong relationships that aren’t hardened by legal formalities can be advantageous. However, it can also leave your business at risk. This is especially true when it comes to how your contracts are handled. If you rely upon verbal agreements, then you might find yourself facing a breach of contract issue.
But can verbal promises be legally enforced?
The answer to this question depends on the circumstances at hand. To better gauge whether a verbal promise constitutes a contract, you need to assess the following factors:
- Whether an offer was actually made
- Whether that offer was realistic
- Whether the offer was accepted
- The previous dealings of the parties
- Whether there was detrimental reliance on the part of the party that accepted the offer
Each of these factors can be pivotal in your case, but detrimental reliance can be especially important. Here, you’ll have to assess whether the accepting party was financially harmed by relying on the verbal promise. This might include missing out on what would have been another favorable contract or an inability to fulfill orders due to undelivered but anticipated goods.
Have a legal ally on your side in your contract dispute
Contract disputes arise all the time in the business world. When it comes to small businesses, though, far too often those impacted by a contract issue simply eat their losses and move on. This can result in serious financial harm and damage to a business’s reputation. Don’t let that happen to you and your business. If you feel like you’ve been wronged in some way, or if you need to protect yourself against allegations of wrongdoing, then now is the time to seek out the help that you need to protect your interests as fully as possible.