What Types of Oral Contracts are Enforceable in California?

types-oral-contracts-enforceable-california

There is a widespread misunderstanding that a contract must be “in writing” for it to actually be a contract which can be enforced. To be sure, “get it in writing” is often good advice as a document signed by both parties to a contract is far better evidence that a contract exists than one person’s word against another’s.

But it is not the case that a contract always must be in writing in order for it to be enforceable in court. Except when it does. Which is to say that there are certain types of contracts which must be in writing – or at least evidenced by some other type of record – for those contracts to be enforced.

 

California’s Statute of Frauds

Thus, when thinking about the question of what type of oral contracts (meaning ones not memorialized in a written document) are enforceable, it is actually easier to think about types of contracts MUST be evidenced by a writing to be enforceable. In California, these types of contracts are listed in the state’s Statute of Frauds, written into the state code at Cal. Civ. Code Section 1624.

While the use of the term “frauds” may make you think there has to be some level of deception to trigger the requirements of the law, that is not actually the case. Instead, the Statute of Frauds simply lists those types of documents which must be written or evidenced by a comparable record to be enforceable.

These types of contracts which cannot be enforced as oral contracts include:

  • An agreement that cannot be completed within one year (e.g. an employment agreement that lasts for 18 months, or a lease that lasts for longer than a year)
  • An agreement to answer for the debt or default of another
  • An agreement for the sale of real estate
  • An agreement authorizing a third party (an agent or broker) to engage in a real estate transaction or lease a property for longer than a year
  • An agreement that cannot be performed during the lifetime of the person promising to perform
  • An agreement to pay the mortgage on a property
  • An agreement to lend more than $100,000 or extend credit in the same amount, not primarily for personal, family, or household purposes
  • An agreement for the sale of goods over $500
  • An agreement for the sale or personal property over $5,000

Putting this all together, other types of contracts may indeed be enforceable even if they are only oral contracts. Again, however, there will be the challenge of proving that the oral contract did indeed exist.

 

Exceptions-to-the-California-Statute-of-Frauds

Exceptions to the California Statute of Frauds

That said, even if there is not a contract signed by both parties for a contract listed in the Statute of Frauds, there may be other ways of enforcing the contract. Under California law, a party may still be able to enforce such a contract if:

  • There is evidence of an electronic communications such as a text or phone call which points to the existence of the contract
  • There is a written confirmation by the party seeking to enforce the contract within 5 days of the agreement, and there is not a prompt written objection to the confirmation
  • The party against whom enforcement of the contract is sought sends a written confirmation of the existence of the contract; or
  • The party against whom enforcement of the contract is sought admits to the contract in testimony or in a court pleading

Speak to a California breach of contract attorney for guidance on your particular situation.  

 

Contact the California Breach of Contract Attorneys at Wagenseller Law Firm

At Wagenseller Law Firm in downtown Los Angeles, we provide full legal services to individuals and businesses in business and real estate litigation matters. Contact Wagenseller Law Firm today to schedule a consultation to discuss your real estate matter.