Verbal Agreement Canada: What You Need to Know
A verbal agreement, also known as an oral contract, is a legal agreement made by two parties verbally, without any written documentation. These types of agreements are common in Canada, but they can often lead to confusion and disputes. In this article, we’ll discuss what you need to know about verbal agreements in Canada.
Are Verbal Agreements Enforceable in Canada?
The short answer is yes, verbal agreements are enforceable in Canada. However, proving the terms of a verbal agreement in court can be challenging without any written documentation. Verbal agreements are often based on trust and verbal assurances, making them difficult to enforce.
The court will consider several factors when determining the validity of a verbal agreement, including:
1. The intention of the parties: Did both parties intend to enter into a legal agreement, or was it simply a casual conversation?
2. Clarity of terms: Were the terms of the agreement clear and understood by both parties, or was there confusion or misunderstanding?
3. Evidence: Is there any evidence to support the existence and terms of the verbal agreement?
To increase the chances of enforcing a verbal agreement, it is recommended to document the terms of the agreement in writing as soon as possible after the agreement has been made. This can be done through an email, text message, or even a handwritten note.
When Are Verbal Agreements Not Enforceable?
There are certain circumstances where a verbal agreement may not be enforceable in Canada. These include:
1. Agreements that require written documentation: Some agreements, such as agreements for the sale of land or a lease for more than three years, require written documentation under the Statute of Frauds.
2. Agreements that violate the law: Verbal agreements that go against Canadian law, such as agreements to commit a crime or engage in fraudulent activity, are not enforceable.
3. Agreements that lack consideration: Consideration is a legal term that refers to something of value given by one party to another in exchange for something else of value. Verbal agreements that lack consideration are not enforceable.
In conclusion, verbal agreements are enforceable in Canada, but they can be difficult to prove in court without any written documentation. If you are entering into a verbal agreement, it is recommended to document the terms in writing as soon as possible. Additionally, some agreements, such as those for the sale of land, require written documentation under the Statute of Frauds. Always consult with a legal professional if you have any questions or concerns about a verbal agreement.