In the world of business, contracts are a crucial aspect of a successful transaction. Contracts can be verbal or written, and both hold the same legal weight. Verbal contracts are agreements made through spoken words and are considered legal, although they may be harder to enforce in court. In this article, we will explore the different types of verbal contracts and what they entail.

1. Express Verbal Contracts

Express verbal contracts are agreements that are explicitly stated by both parties involved. These types of contracts have clear terms and conditions that are agreed upon verbally. For instance, if a business owner agrees to hire an employee at a certain salary, and the employee accepts the offer, that is an express verbal contract. Express verbal contracts can cover a range of agreements, from employment terms to sales agreements.

2. Implied Verbal Contracts

Implied verbal contracts are agreements that are not explicitly stated but are inferred from the actions, conduct, or circumstances surrounding the agreement. For instance, suppose a contractor performs work on a customer`s property without explicitly stating the terms of payment. In that case, there is an implied verbal contract, and the contractor can assume payment for the work performed. Implied verbal contracts can be established by the conduct or actions of the parties involved.

3. Simple Verbal Contracts

Simple verbal contracts are agreements that are not written down and are usually made between friends, family, or people who know each other well. These types of agreements can be informal and may be difficult to enforce in court. For instance, if two friends agree to lend each other money, that is a simple verbal contract.

4. Formal Verbal Contracts

Formal verbal contracts are agreements made between two parties with the intention of creating a binding legal agreement. These types of agreements are usually made in a business context and are often used to establish a long-term relationship between the parties involved. Formal verbal contracts tend to involve more significant transactions and can include agreements such as the sale of property or the transfer of ownership of a business.

It is essential to remember that verbal contracts are legally binding, and both parties are responsible for upholding their obligations under the agreement. However, verbal contracts can be harder to enforce in court because there is no written record of the agreement. It is recommended that parties involved in verbal contracts take steps to document the agreement, such as recording the conversation, sending follow-up emails, or asking for written confirmation of the agreement.

In conclusion, many different types of verbal contracts exist, and they can cover a range of agreements. As with any contract, it is essential to understand the terms of the agreement fully and ensure that both parties are clear on their obligations. If in doubt, seek legal advice before entering into a verbal agreement.