Verbal contracts, also known as oral contracts, are agreements made between two parties without any written documentation. These types of contracts are based on the spoken word and rely solely on the trust and understanding between both parties. However, the question that often arises is whether verbal contracts are legally binding in Minnesota.
In Minnesota, verbal contracts are legally binding, just like written contracts. However, proving the terms and conditions of a verbal contract can be challenging if it ever comes to a dispute. It is always advisable to have a written contract as it serves as proof of the agreement between both parties.
Under Minnesota law, any agreement that involves the exchange of goods or services worth $500 or more must be in writing to be enforceable. This is known as the Statute of Frauds. However, if an agreement is less than $500, it can be made verbally and is still legally binding.
Minnesota Statute 513.33 outlines the requirements for proving the terms of a verbal contract. The statute requires that the terms of a verbal contract must be clear and specific, and both parties must have a clear understanding of the terms. Additionally, the terms of a verbal contract must be proven by clear and convincing evidence in court.
If a dispute arises regarding the terms of the verbal contract, it can be challenging to prove the terms and conditions of the agreement. This is why it is always advisable to have a written contract that outlines the terms and conditions of the agreement to avoid any misunderstandings or disputes.
In conclusion, verbal contracts are legally binding in Minnesota, as long as the terms are clear, specific, and both parties have a clear understanding of the terms. However, it is always advisable to have a written contract to avoid any disputes or misunderstandings. If you need assistance with drafting a written contract or need advice on enforcing a verbal contract, it is always advisable to seek the advice of a qualified attorney.