Before answering the question, “can a verbal agreement be legally binding,” it’s essential to know the basic formula for a valid contract to exist. Additionally, it should be noted that every state has its own law on contracts.
Generally speaking, for a contract to be enforceable, assuming the terms are legal, there must be: (a) an offer and acceptance of such offer, (b) valid consideration exchanged between the parties, and (c) a meeting of the minds/intent to be bound by the terms. If a verbal agreement establishes these elements, then on its face, the agreement is legally binding.
HOWEVER, there are dozens of exceptions. Many of them revolve around the State’s Statute of Frauds and the UCC, as well as contracts related to marriage.
Can a verbal agreement be legally binding in NJ?
Yes, a verbal agreement in NJ can be legally binding. However, dozens of exceptions exist including but not limited to: (a) agreements subject to the Statute of Frauds and/or NJ Uniform Commercial Code; (b) contracts for the sale of securities; (c) agreements to give a security interest; (d) and agreements subject to the New Jersey Consumer Fraud Act.
Since breach of contract is one of the most litigated areas of civil law, it’s important to have rock-solid contracts in place prior to engaging in any type of transaction. Our business attorneys can help you draft and prepare multiple types of business contracts regardless of what industry you’re in. Contact us to learn more.