Are Oral Agreements Binding In Florida?

Defining Oral Agreements

To answer the question about what type of contracts are enforceable in Florida, we need to go back to the basics about contract law. Almost every business deal known to mankind is enforceable, and unless you are going to draft an enforceable contract you will need enforce the deal by verbal agreement.
Verbal agreements are simply agreements that arise from oral communication, rather than writing. As long as there were clear terms of the agreement to form a contract under contract law, the fact that the contract was never reduced to writing does not mean that a contract was formed.
For example, if I sell you my car and we verbally agree to the sale, we have an enforceable contract even though nothing was reduced to writing. In order to enforce the verbal agreement , the judge will look for three things that will prove there was an agreement: 1) there were definite and clear terms to the agreement; 2) the parties mutually agreed to the terms of the agreement; 3) and there was an intention by the parties to enter into the agreement.
The judge will look at the words that were used and the actual conduct of the parties to see if they can determine what the terms of the contract were. Even an element like price is not always necessary to find that a contract has been created. For example, under Florida law, the method of calculating price does not have to be specified to find that the parties entered into an enforceable contract.

Legality of Oral Agreements in Florida

In the state of Florida, verbal agreements are generally binding unless the Statute of Frauds or some other statutory enactment makes such an agreement unenforceable. Unlike some states where verbal agreements carry little weight in a legal proceeding, in the Sunshine State oral contracts are enforceable in a court of law if there is sufficient evidence to substantiate the existence of the contract and its terms. Ordinarily, the testimony of the parties to the contract and/or disinterested witnesses, as well as documents or other tangible evidence may be used to prove a verbal agreement. However, an oral contract can be difficult to prove, and it is always better to reduce an agreement to writing, particularly when a contract relates to the sale of real property or is for a value over $500.00.
Of course, most people are concerned with interpretation or construction of a purported contract rather than enforcement of the contract. Under Florida law if a contract is reduced to writing it is assumed to express the intent of the parties and will only be enforced against the parties to the contract.
Even if a verbal agreement is otherwise enforceable under the Statute of Frauds, the law does provide certain exemptions from the Statute of Frauds. For example, where a party has fully performed its side of the contract by delivering possession of the property or partially performing its side of the contract, i.e., performing some service under the contract, then Florida courts may enforce the agreement under the doctrine of part performance. However, Florida courts have ruled that the part performance doctrine may be lost if the conduct of the parties is consistent with another relationship, such as that of a debtor/creditor or employer/employee.

Exceptions to Enforcement

The exceptions listed below demonstrate that, although verbal agreements may be enforceable in Florida, there are specific situations where the law requires a written contract. For example, Florida Statute section 725.01, dealing with an agreement for the sale of real property, requires such a contract to be in writing and signed. Likewise, Florida Statute section 725.01 provides that contracts which cannot possibly be performed within a year must be in writing. The statute provides: No action shall be brought upon any contract for sale of real Estate or any agreement that is not to be performed within the space of 1 year from the making thereof unless the agreement upon which action is brought, or some note or memorandum thereof, must be in writing to be enforceable. Many agreements fall within these parameters. For example, an agreement to purchase real estate is not enforceable unless it is in writing. Moreover, an agreement to rent an apartment for thirty-one (31) months is not enforceable because it is longer than one year.

Proving an Oral Agreement

Proving a Verbal Agreement in Florida
The failure to establish a verbal agreement is generally fatal to a breach of contract claim, and difficult to establish. Without an enforceable contract, the recovery will usually be limited to unjust enrichment (rpcoming post). The Pierson v. Lakeland Glass Co., 904 So. 2d 455 (Fla. 2d DCA 2005) decision is instructive because it upheld an award for lost profits where there was no express enforcement agreement, i.e. a contract. The court reaffirmed the principle that "to recover lost profits, Pierson must prove that it made an offer of contract, that Lakeland accepted the offer, and that Pierson had prepared to carry out its part of the bargain." Id. at 456.
Thus , the evidentiary requirements and proof necessary to defeat summary judgment in a breach of contract action due to a verbal agreement can vary. In most cases there must be witnesses and correspondence. See, e.g., Zuckerman v. Coastal Physician Services, Inc., 217 So.2d 312 (Fla. 4th DCA 1969). This is because oral agreements are sharply disfavored because of the potential that one party will lie about the agreement, and the difficulty of proving the content of a verbal agreement. Lack of an enforcement agreement merely exposes one’s self to the uneutra challenge that the agreement did not in fact exist. An oral contract may be enforced only when it establishes definite and certain terms. McRee v. Walker, 522 So.2d 1046, 1047 (Fla. 2d DCA 1988).

Common Scenarios for Oral Agreements

In practice, there are a number of circumstances in which oral agreements and contracts come up. Below are examples of some of the most common situations in which verbal agreements are often utilized and upheld in Florida:
Service Agreements
When looking at other services, you must also consider whether any licenses are at play. Oral contracts are not enforceable for the sale of real estate or any other interest in real estate. However, they are valid and enforceable when it comes to services or other personal matters. If you are in need of any household improvements—such as painting, plumbing, electrical work, and the like—you may strike an agreement with a local handyman or service provider in a very casual manner, and it will likely still be valid and able to be enforced. The situation becomes murkier, however, when you start involving potentially licensed professionals, such as real estate agents, attorneys, and accountants. It is important to get a good idea of whether the person you are dealing with should have a license, and contact an attorney right away if you are not sure.
Implied Oral Agreements
Some oral agreements can be just inferred from various actions taken by the parties. One party returning a rental car to a rental company is generally enough to create an implicit agreement for that person to have rented the car in the first place. There is no written contract to be signed. It is assumed that the person has hired the car company in the presence of an employee of that car company, and that the person is renting the car. They return the car at the end of the rental period that has been agreed to, and thus the contract ends.
Informal Business Agreements
Ways in which verbal contracts commonly come into play with businesses include instances where a company agrees to perform a job in exchange for a certain amount of money within a certain timeframe. This agreement might be verbally made over the telephone, for example. In such a situation, even though there may not be a written contract, the verbal agreement would still be binding on both parties.

Oral Agreement Tips

There is no question that verbal agreements are often the subject of dispute. When you talk about "he said – she said" and when one person makes an agreement but another party says that the agreement really has some other details or is not binding yet, or "I was just kidding" – yes, that kind of nonsense causes expensive lawsuits.
However, there are ways to make verbal agreements work. Here are a few:
Document discussions with important details. Just like a real estate agent should always document communications with a customer about the terms of a proposed real estate deal and material information that the real estate agent becomes aware of so there are no misunderstandings later on, the same applies to businesses and individuals who are communicating. If you respond to someone verbally, and in response to your comments, the other person responds verbally so that you now have a whole series of discussions that you have both taken as an agreement to a certain course of action, when you document the discussions that led to an agreement, it not only memorializes the terms for later use but it also will usually prevent the two parties from arguing later on that there were other discussions or something different was said. The act of writing down conclusions will often cause a person to not be as brazen in later claiming that the other party broke a verbal agreement.
Keep good records. Lawyers cannot sue on a verbal agreement. Contracts must have certain things addressed in order to be enforced . Sometimes those things include the right language in order to hold a third party liable or sometimes it means that you must have a writing that is signed by both parties to the agreement. These things can often be a matter of supply and demand and the type of contract involved, but rarely can a lawyer sue on just a verbal agreement. Therefore, if the verbal agreement is important to you, you need to keep great records. Write down the dates, times, people involved in the discussions, content of the discussions, etc. If there are multiple discussions, you need to try and keep them indexed and organized. You really need to be your own clerk of court to make sure that the verbal agreement can be proven to exist. Sometimes the best communications are just the easiest and simplest and do not need to be memorialized. But oftentimes, you really do need the information documented so that you can rely on it later.
Follow up with written confirmations. If you really believe that a verbal agreement is important, or it is a deal breaker, write down the details and get the other side to confirm. Confirm, confirm, confirm. Keep track of your confirmations. This is not just for the little people. I have had billion dollar corporations confirmed deals in written correspondence, but then had senior executives back out later. There has to be a meeting of the minds to enforce a contract, and therefore, if you want a verbal agreement to be enforceable under Florida law, get your contact to buy a pen and paper and get them to sign the deal. Articulate the deal in an email and send it to them. Follow up! This will help reduce the "he said – she said" scenario from happening.