You have agreed to carry out work for someone, provide a service or supply goods, but when something goes wrong, you realise there is no written contract in place. Perhaps a customer has refused to pay an invoice, a contractor has failed to complete the agreed work, or a business has not delivered what was promised.
Does this mean you have no legal protection?
You can take legal action without a written contract in many circumstances. Under English contract law, agreements do not always need to be recorded in writing to be legally binding. Verbal agreements, emails, text messages and even the conduct of the parties can help establish that a contract exists.
However, proving the terms of an agreement can be more difficult when nothing has been formally documented.
At AFG Law, our Dispute Resolution solicitors assist individuals and businesses with contractual disagreements, including disputes where the parties never signed a written agreement.
Is a verbal agreement legally binding in the UK?
Yes. In England and Wales, an oral agreement can be legally binding, provided the necessary elements of a contract are present. Generally, a valid contract requires:
- Offer: One party makes a sufficiently clear proposal, such as agreeing to complete work for a particular price.
- Acceptance: The other party agrees to the offer.
- Consideration: Each party provides something of value, such as payment in exchange for goods or services.
- Intention to create legal relations: The parties intend their agreement to have legal consequences.
- Certainty of terms: The agreement is sufficiently clear about what each party has agreed to do.
For example, a small business might agree over the telephone to provide £5,000 worth of services to another company. If the customer accepts the quotation and the work is completed, there may be an enforceable contract even though neither party signed anything. The difficulty often arises when the parties disagree about what was promised.
One person might say that additional work was included in the original price, while the other maintains it was never part of the bargain. Without a written agreement, establishing the terms may depend on other evidence.
How can you prove a contract exists without anything in writing?
If you are considering legal action, one of the first questions will be whether there is sufficient evidence to demonstrate that an agreement was reached. Although there may be no signed written contract, other documents and communications can help establish the arrangement.
These might include:
- Emails discussing the work, price or delivery dates.
- WhatsApp messages or text conversations.
- Quotations, purchase orders and invoices.
- Bank statements showing previous payments.
- Records of work completed or goods delivered.
- Witness evidence from people involved in the discussions.
- Evidence showing how the parties behaved after reaching the agreement.
For example, if a contractor sends a quotation, the customer replies accepting it and the contractor begins work, those communications may provide strong evidence of a contract.
Even where the original agreement was entirely verbal, the parties’ subsequent conduct can help establish what they intended. However, not every conversation creates a legally binding agreement. The evidence must be considered in context.
Can you sue someone for breach of a verbal contract?
Yes. If an enforceable contract exists and one party fails to fulfil their obligations, the other party may have grounds to bring a breach of contract claim.
Examples include a customer refusing to pay for completed work, a supplier failing to deliver goods or a contractor abandoning a project. To succeed with a contract claim, you will generally need to establish that:
- A legally enforceable contract existed.
- The other party breached one or more of its terms.
- You suffered a recoverable loss as a result, where compensation is sought.
For example, imagine you verbally agree to pay a contractor £8,000 to refurbish your office.
You pay £4,000 upfront, but the contractor completes only a small proportion of the work before refusing to return.
Depending on the evidence and circumstances, you may be able to pursue compensation for the breach, including reasonable additional costs of having the agreed work completed.
However, the amount recoverable will depend on the contract terms, the losses caused by the breach and your obligation to take reasonable steps to minimise those losses.
Our article on breach of contract claims explains how contractual disputes may be resolved.
What happens if you disagree about the terms of a verbal contract?
Disagreements about the terms are among the most common problems with verbal agreements. For example, a customer might accept that they instructed a contractor but dispute the agreed price.
Alternatively, the contractor may believe additional services were included, while the customer maintains that the original quotation covered everything. This is particularly common where the parties have not clearly agreed the scope of work, payment terms or completion dates.
A written contract usually defines the scope of the services, what each party must provide and when payment becomes due.
Without this clarity, the court may need to consider the available evidence to determine what was actually agreed. The court may also consider whether relevant terms can be implied into the contract by law.
For example, where the Consumer Rights Act 2015 applies to a contract between a trader and a consumer, services must generally be performed with reasonable care and skill. Where the price or time for performance has not been fixed, statutory provisions may also apply.
The precise position will depend on the type of agreement and the parties involved.
Can you recover money if there was no valid contract?
In some circumstances, you may still have a claim even where it is difficult to establish an enforceable contract. One possible basis is unjust enrichment.
This area of law concerns situations where one party has received a benefit at another person’s expense and there is a recognised legal reason why retaining that benefit would be unjust.
For example, a business may have supplied valuable services in circumstances where no enforceable contract was ultimately formed. Depending on the facts, it may be possible to seek a reasonable payment for the benefit provided.
However, unjust enrichment is not simply an alternative available whenever a breach of contract claim is unsuccessful.
There are specific legal requirements, and an existing contract may affect whether such a claim is available. Obtaining legal advice can help establish whether the circumstances support a contractual claim, an unjust enrichment claim or another legal remedy.
Are there situations where a written contract is legally required?
Yes. Although many commercial and personal agreements can be made verbally, certain transactions are subject to formal legal requirements.
For example, contracts for the sale or other disposition of an interest in land generally need to comply with the written and signature requirements under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.
Guarantees are also subject to specific statutory requirements concerning written evidence. This means you should not assume that every verbal agreement will be enforceable. The legal requirement depends on the type of transaction and the relevant legislation.
For ordinary agreements to supply goods or services, however, a signed written contract is not always necessary.
What should you do if someone breaches a verbal agreement?
If a disagreement arises, it is usually sensible to establish the facts and consider whether the matter can be resolved before starting court proceedings.
Gather evidence of the agreement
Collect relevant communications, invoices, quotations, payment records and any other documents supporting your position.
Make a note of important verbal conversations, including when they took place, who was involved and what was agreed.
Explain the problem to the other party
Set out what you believe was agreed, how the other party has failed to comply and what you want them to do to resolve the matter.
For example, you might request payment of an outstanding invoice or reimbursement of additional costs.
Consider sending a letter before action
If informal discussions are unsuccessful, a formal letter before action may be appropriate.
This explains the legal basis of the proposed claim, the relevant facts and the remedy being sought.
The applicable pre-action protocol or court rules should be followed before proceedings are issued.
Explore alternative dispute resolution
Court proceedings are not always the most proportionate way to resolve a disagreement. Negotiation or mediation may help the parties reach a settlement without the time and expense of litigation.
Our Dispute Resolution team can advise on the available options and whether pursuing a claim is commercially worthwhile.
How long do you have to bring a claim without a written contract?
For most straightforward breach of contract claims in England and Wales, the limitation period is six years from the date the cause of action accrued. This generally applies whether the contract was written or verbal.
However, different limitation periods can apply depending on the nature of the agreement, the claim and the circumstances.
For example, contracts executed as deeds can be subject to a twelve-year limitation period.
It is important to obtain advice promptly rather than assume you have six years from the date you first discovered the problem.
How can businesses avoid disputes over verbal agreements?
Although verbal agreements can be enforceable, recording important arrangements in writing provides greater certainty. For a small business, this does not necessarily mean preparing a lengthy contract for every transaction.
Even a clear quotation or email confirming the agreed terms can help reduce the risk of disagreements.
Ideally, the agreement should explain what goods or services will be provided, the price, payment terms, relevant deadlines and what happens if either party fails to perform.
For more substantial transactions, a properly drafted written agreement can provide additional legal protection by addressing liability, termination rights and dispute resolution procedures.
Taking these steps can help protect your business and make it easier to resolve problems if a disagreement arises.
Speak to AFG Law about a contractual dispute
Not having a signed contract does not automatically prevent you from taking legal action. However, the strength of your claim will depend on whether an enforceable agreement existed, what terms were agreed and what evidence is available.
At AFG Law, our Dispute Resolution solicitors advise individuals and businesses on breach of contract claims, unpaid invoices and disagreements over goods and services.
We can review the available evidence, explain your legal position and advise on the most appropriate steps to resolve the dispute.
We have offices in Bolton and Bury and assist clients throughout England and Wales.
If you are involved in a disagreement over a verbal agreement or an unsigned contract, contact AFG Law on 01204 377600 or complete our online enquiry form.