VALIDITY OF AN ORAL AGREEMENT

An oral agreement is as equally valid, as a written one. The legality, of an oral agreement, cannot
be questioned, if it falls under the ambit of the requirements stated in section 10 of the Indian
Contract Act, 1872.

1. This was substantiated by the Delhi High Court, in the case of Nanak Builders and
Investors Pvt. Ltd. vs. Vinod Kumar Alag 1, whereby the Court held that even an oral
agreement can be a valid and enforceable contract. Therefore, in the strict sense, it is not
essential that a contract must be in writing, unless specified by law or the parties
themselves contemplate the reduction of terms of agreement to writing.
2. The same was reiterated by the Supreme Court in the case of Alka Bose vs. Parmatma
Devi & Ors2 whereby the Court held that even a sale agreement can be oral and have the
same binding value and enforceability, as a written agreement. The agreement should be
in tandem with the essentials listed in section 10 of the Indian Contract Act, 1872 and
thus, will have the equal force of evidentiary value, as a written one.
3. Then in the case of Sheela Gehlot vs. Sonu Kochar & Ors3 Delhi High Court observed
that oral agreements are valid and enforceable and there could be no dispute about it.
Until there is anything which needed to be written, an oral agreement will enforce.
Further for a contract, there has to be some proposal and acceptance. And for the oral
agreement, there should be some circumstances surrounding the alleged oral agreement.
No one can question the oral agreement as invalid.

1
AIR 1991 Delhi 315.
2
AIR 2009 SC 1527.
3
2006(92) DRJ 498.