So in Martin and Sam’s case, nothing of value was exchanged – so Martin would probably be legally free to renege on his promise.īut in that case, if Sam had already started performing the work associated with the promotion and Martin was aware of this, then it is more likely that a court would recognise the verbal agreement as binding. This is known as ‘consideration’ (as strange as it may sound to call it that). Luckily the law will only consider an agreement to be enforceable if the person receiving the promise provides something of value in exchange for it. If every offer/acceptance agreement was legally binding this would create absolute chaos in society because everybody would be totally bound to every little promise they make. This is not because the agreement is verbal, but because nothing of value has been exchanged or promised. This is just step one – if that is all that happened then neither party would be bound at this point in time. Martin (the boss) verbally offers Sam (his employee) a promotion – ‘offer’. The ‘offer and acceptance’ principle really is as simple as it sounds, if someone makes an offer and you accept – then you’ve fulfilled the first step for a verbal agreement becoming legally binding. Step 1 There needs to be offer and acceptance Here are the three main ingredients for a verbal agreement to become contractually binding. However, an agreement does not need to be in writing to be legally binding as enforceable contracts can either be in written or verbal form. I once heard an employer tell an employee she didn’t have to fulfill a promise because it was “only a verbal contract”. Verbal promises can be legally binding if they meet these standards… so be warned! In some circumstances you might be bound by what you say.