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The Enforceability of Oral Contracts in Georgia Courts

Posted in Personal Injury on November 9, 2020

Contracts come in various forms, though most people think of written contracts when they think of business deals, buying a car, purchasing a home, etc. It is important to memorialize the terms of these agreements in ways that are visible for all to see, and a written agreement is typically ideal. In some cases, a written contract is required. However, in the course of making business deals, many agreements are simply not put into writing. Often, the various parties involved discuss the terms of a deal and settle with a handshake. This is considered an oral agreement.

Oral agreements are usually valid, but various issues can arise when there is a dispute amongst the parties involved regarding the terms of the agreement. Here, we want to discuss the enforceability of oral contracts in Georgia.

Some contracts need to be in writing no matter what

Georgia law (Statute of Frauds) states that various types of agreements must be in writing or they will not be enforced. This includes the following:

  • An agreement by a third party to pay a debt owed by another
  • Any contract to sell or lease a property
  • Contracts that cannot be fully performed within one year
  • A promise to reinstate a debt that was barred by the statute of limitations
  • Any promises to lend money

Oral agreements in Georgia

Oral agreements made in Georgia may be enforceable even if the type of contract would otherwise have been governed by the Statute of Frauds in Georgia. This includes situations such as the following:

  • The contract has not been fully executed
  • One party has carried out the terms of the agreement, and it was accepted by the other party in accordance with the contract
  • The contract has been partially performed, and it would not be equitable to compel the counterparty to perform their part

Outside of the types of contracts that must be in writing per Georgia law, written contracts are allowed. These contracts can be used for any number of situations. For example, two neighbors may have an oral contract to trade a used lawnmower for a used washing machine. Essentially, this kind of agreement may not need to have much detail written down. Generally, the simpler the contract, the lower the chances that the parties will need to go to court to resolve differences, and the more likely the matter will be oral as opposed to written.

However, it is generally recommended to get anything other than the most simple agreement put into writing and signed off on by all parties involved. This can help keep all parties accountable for their actions during the course of the contract and resolve any disputes that may arise.

Should you involve an attorney?

When determining whether or not to work with an attorney to help draft the contract, you need to look at the complexity of the matter at hand. In general, an attorney is going to be necessary for major contracts such as buying or selling property, important business deals, etc. Contracts can become very complex, and most individuals do not have a particular knowledge of the legal language that goes into a contract. If the thought pops into your mind that you may need an attorney for your contract matter, chances are you do. Also, bear in mind that if any other party involved in your contract has an attorney, you need to have one as well. This is a sign that the other parties take the matter seriously, and a contract could be used to settle any dispute that arises in the future.

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