Are contracts made orally be legal?

•  Most contracts are made orally and are just as legal as written contracts if they can be proven.

•  Every state has a statute of frauds requiring certain contracts to be in writing. The most common are (1) a contract to pay a debt of another person, (2) a contract to pay the debt of a deceased person out of personal funds, (3) a contract for the sale of real property, or an interest in real property (4) a contract in consideration of marriage, (5) a contract that cannot be performed within one year of the date of the agreement, and (6) a contract for the sale of goods or merchandise worth $500 or more.

•  The written evidence required by the statute is an informal memorandum that contains the essential terms of the agreement: names of the parties, subject matter of the agreement, consideration, and important terms. It need be signed only by the party who will be held responsible.

•  Oral evidence is not admissible in court to alter, add to, or vary the terms of a contract that represents the parties’ final and complete statement of their agreement.

•  Oral evidence is admissible in court to explain vague or confusing terms in a written contract; to show that agreed-upon terms were accidentally omitted or are incorrect; or to prove illegality, fraud, or mental incompetence.

•  Oral changes to a written agreement made subsequent to the writing are allowable. Oral changes are not allowable, however, if the written agreement was required by the statute of frauds to be in writing.

•  Electronic signatures (e-signatures) are now just as legal and enforceable as printed and typed signatures according to the E-Sign Act.