Oral Expression and Oral Contract

Oral Expression: According to Lexicon (Collins) dictionary Oral

expression means “Spoken Rather than Writing”

Oxford Dictionary

 Spoken rather than Writing

 Connected with the Mouth
 A group of signs that represent an idea.

Black’s Law Dictionary

 Made known distinctly and explicitly

 Uttered by the mouth or in words, spoken not written

Oral contract: Black’s law dictionary: A contract agreed verbally, but

not in writing, the existence of which can be difficult to prove.
Dictionary law.com: An agreement made with spoken words and either
no writing or only partially written.

Example: A says to B, will you buy a car for Rs. 1000000? A says to B,
I am ready to buy your car for Rs. 1000000. It is an express contract
made orally.

An oral contract is just as valid as a written agreement. The main

problem with an oral contract is proving its existence or the terms. An
oral contract is as good as the paper it's written on." An oral contract is
often provable by action taken by one or both parties which is obviously
in reliance on the existence of a contract.
The other significant difference between oral and written contracts is
that the time to sue for breach of an oral contract (the statute of
limitations) is sometimes shorter. For example, California's limitation is
two years for oral compared to four for written, Connecticut and
Washington three for oral rather than six for written, and Georgia four
for oral instead of 20 for written.

An oral contract is a contract, the terms of which have been agreed by

spoken communication. This is in contrast to a written contract, where
the contract is a written document. There may be written or other
physical evidence, of an oral contract – for example where the parties
write down what they have agreed – but the contract itself is not a
written one.

In general, oral contracts are just as valid as written ones, but some
jurisdictions either require a contract to be in writing in certain
circumstances (for example where real property is being conveyed), or
that a contract be evidenced in writing (although the contract itself may
be oral). An example of the latter is the requirement that a contract of
guarantee be evidenced in writing, which is found in the Statute of
Frauds.

Similarly, the limitation period prescribed for an action may be shorter

for an oral contract than it is for a written one.

The term verbal contract is sometimes incorrectly used as a synonym for

oral contract. However, a verbal contract is one that is agreed to using
words, either written or spoken, as opposed to an implied contract.[1]
What Is an Oral Contract?

Oral contracts are spoken agreements that are sometimes legally

binding. The problem proving an oral contract is the lack of significant
evidence. Oral contract cases often rely on the performance of one or
both parties that exhibits a clear confidence on the agreement.
Can You Sue for Breach of an Oral Contract?
Certain oral contracts are considered enforceable. Enforceable contracts
are those which a legal remedy is offered if they are breached by either
party.
When Are Oral Contracts Unenforceable?
Oral contracts are unenforceable if they fall under the Statute of Frauds
which requires a written agreement for instances such as:

 Marriage
 Sale of goods above a certain value (varies by state)
 Transfer of land ownership
 Contracts that cannot be fulfilled within a year
 Assuming the position of executor of a will
 Becoming a surety for another party’s debt.

Reason for forming an Oral Contract?

Oral Contracts are at their best when they pertain to simple agreements,
easily memorized.

For example: X agrees to buy Y a refrigerator on phone X and Y agreed

on the agreement and inform Z about this dealing. X and Y concluded
an oral contract in the witnesses of Z.

Usually contracting parties in some case preferred to conclude the Oral

Contract if the agreement is too complex to be written down- Written
contracts are designed for complex deals. Oral contracts, in contrast,
should be the simple ones.

Neither party has the time to conclude the complex and vast agreement
so in some cases because of time constraint the party preferred to
conclude an oral contract.

Why Should NOT go for an Oral Contract?

 The other party asks for an oral contract only- If one party is not
willing to have a contract written down, this is a sign that good
faith may not be on that party’s agenda..

How to Form an Oral Contract?

Although it’s not advisable to conclude an oral contract even though iIf
you wish to form an oral contract, be sure that you can prove that such a
contract was made.

Evidence or proof of your Contract performance is very important that

could be:
Physical Witnesses

E-mails,

Letters,

Receipts

Thank you card, can count as evidence for your performance of oral
contract.

Bhagavandas Goverdhandas Kedia v. Giridharilal Pursotamdas and

Co (All India Reporter ( AIR) 1966 SC 543:
In this case the Plaintiff ( Badi Bhagavandas Goverdhandas Kedia )
made an offer to Defendant ( Pratibadi- Giridharilal Pursotamdas) on
phone for the purchase of cotton seed. The defendant accepted this
offer on phone. The defendant failed to supply the materials; plaintiff
filed the case against defendant claiming Rs. 311150.00 for the breach of
contract.

Chief Justice, Hidayatullah accepts the plaintiff claims saying “when the
words of acceptance are spoken into the phone so the contract was held
between the parties……..defendant is liable to pay the claimant for
breaching the oral contract concluded between the parties…………….

Texaco vs. Pennzoil case

Samuel Goldwyn said, "An oral contract is as good as the paper it's
written on,". The vast majority of transactions among individuals and
between people and merchant companies are, in fact, the execution of
oral contracts.

Oral contracts, when made correctly before witnesses, can be

enforced.

For example, in 1984, after Getty Oil was sold to Pennzoil in a

handshake deal, which is legally binding under New York law, Texaco
made a higher offer, and the company was sold to Texaco. (Even though
the case was tried in Texas, New York law applied.) Pennzoil filed a
lawsuit alleging tortuous interference with the oral contract, which the
court upheld and awarded $11.1 billion in damages, later reduced to $9.1
billion (but increased again by interest and penalties.

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