Concept of oral contracts in the United States. – Are they ever enforceable? – What are implied contracts?

concept of oral contracts in the United States.
– Are they ever enforceable?
– What are implied contracts?

SAMPLE SOLUTION

Concept of Oral Contracts in The United States

Oral contracts refer to agreements made by spoken communication. The contract between parties is either partly dependent on writing or entirely on spoken words. The contract is equally considered valid as written agreements, although the major problem with it is the ability to keep a reference to the terms. In the United States, an oral contract is enforceable. However, written evidence is required if the contract arises within the statute of fraud. For instance, selling of a real property requires that the agreement be in writing to comply with the statute.

In addition, oral contracts are also enforceable when completed correctly before witnesses. For example, in Texaco vs. Pennzoil case (1984), a case that was tried in Texas, after Pennzoil bought Getty Oil through a handshake deal, which is legal, Texaco issued a large offer, and the entity was offered to them. Later, Pennzoil filed a lawsuit alleging a severe breach of oral contract, which the court determined and awarded a damage worth $11.1 billion (Chirelstein, 2013).

Implied Contracts Implied contracts are legally enforceable agreements that emanate from the parties’ actions, conduct, assumed intentions, interaction, or use of principles of equity. The contract comes into effect when the involved parties do not rely on a written agreement, but the law creates an obligation to perform to promote the interest of equity and fairness based on actions, conduct, and circumstances of the contracting parties. As determined…