Business arrangements typically need to be memorialized in writing for optimal protection. Many people assert that a contract isn’t official until it is on paper and all parties have signed the documents to affirm the terms of the agreement.
However, there are also many professionals and business leaders who work more informally with so-called handshake deals. They set terms directly with other businesses or individual clients and may not necessarily sign a contract outlining the terms of the agreements they’ve reached. In such cases, either party might claim that they’ve entered into a verbal contract.
Are agreements that have not been written and signed potentially valid and enforceable in Kentucky?
Yes, verbal contracts could be enforceable
Provided that two parties have reached a clear verbal agreement with one another outlining the terms of a business arrangement, a written contract is not technically necessary for the parties to have obligations to one another. A verbal contract is theoretically enforceable without a written agreement under current Kentucky law and based on prior judicial precedent set by the courts in the state.
However, verbal contracts can be difficult to validate, as each party may have a different version of events or may have vastly different claims about the terms of the working relationship. Witnesses or any communications in writing, including text messages and emails, can potentially take some of the uncertainty out of validating and enforcing an unwritten contract.
Business leaders and professionals in business for themselves often benefit from relying on written contracts when taking on new projects or starting new working relationships. Consulting a business litigation attorney can help those feeling frustrated by non-compliance with a verbal contract determine if they can take legal action.