You shake hands on a deal, start the work and expect the other person to keep their word. Then the relationship falls apart and someone says, “Nothing was signed.” That does not always end the matter. In Texas, some verbal agreements can form enforceable contracts, but the details of the deal and the type of transaction matter.
A verbal deal can still create a contract
Texas law does not require every contract to appear on paper. Your spoken agreement may be enforceable if you and the other party reached a clear agreement, exchanged something of value and intended to create obligations.
Problems often begin when you and the other party remember the conversation differently. You may believe you agreed on a fixed price, while the other person says they only gave an estimate. A disagreement over a deadline, scope of work or payment terms can create the same problem.
Basic contract elements still matter
A verbal contract still needs the basic features of a valid agreement. You and the other party must agree on essential terms, and each side must give or promise something of value. Conduct can also help show what the parties understood.
Payments, invoices, text messages, emails and work already performed may become important when a court tries to determine whether an agreement existed. If the other party may have broken the agreement, you may also need to consider your broader civil litigation options.
Some agreements must be in writing
Texas requires a signed writing to enforce certain agreements under its statute of frauds. This includes certain real estate contracts, leases lasting longer than one year and agreements that the parties cannot complete within one year.
The rule also covers certain promises to pay another person’s debt. If your agreement falls into one of these categories, relying only on a handshake or conversation may make enforcement difficult.
Business sales have another writing rule
Texas has a separate rule for many sales of goods. In general, if you make a contract for goods priced at $500 or more, you need a sufficient writing signed by the party against whom enforcement is sought, although the law includes exceptions. This distinction may matter if your business deal involves equipment, inventory or other goods rather than services.
Gather records before the dispute grows
If someone challenges your verbal agreement, gather anything that shows what you discussed and how both sides acted. Save text messages, emails, invoices, payment records and documents showing that you completed the work or delivered the goods.
Next, look at the type of agreement you made and whether Texas law required it to be in writing. Taking these steps early can help you understand whether the agreement may be enforceable and what options you have if the other party refuses to follow it.