Verbal Contract Alberta: Understanding the Basics

In Alberta, agreements made orally, or verbal contracts, are recognized by law, but they can be difficult to enforce. While written contracts are the best way to ensure that both parties are aware of the terms and conditions of an agreement, verbal agreements can also be binding, provided that they meet certain requirements and legal standards.

What is a Verbal Contract?

A verbal contract is an agreement between two or more parties made without any written documentation. It is formed by the exchange of promises and consideration, which means that each party must agree to give something of value to the other party. This can be in the form of money, services, or goods.

To be legally binding, a verbal contract in Alberta must meet the following criteria:

1. Offer and Acceptance

The first requirement of a verbal contract is offer and acceptance. This means that one party must offer something to the other party, and the other party must accept the offer. The offer must be clear and unambiguous, and the acceptance must be unconditional.

2. Consideration

Both parties must give something of value to the other party. This can be in the form of money, services, or goods.

3. Intention to Create Legal Relations

Both parties must intend to create legal relations. This means that the agreement must be serious and not a joke or a drunk conversation with a friend.

4. Capacity

Both parties must have the legal capacity to enter into the contract. This means that they must be of legal age, mentally competent, and not under duress or coercion.

5. Certainty of Terms

The terms of the agreement must be certain and clear. This means that all important details, such as the price, quantity, scope, and deadline, must be agreed upon by both parties.

Enforcing a Verbal Contract

If a verbal contract is breached, the injured party can seek legal remedies. However, enforcing a verbal contract can be difficult, as it often involves a “he said, she said” situation that lacks physical evidence. Nonetheless, there are ways to prove the existence and terms of a verbal contract, such as:

1. Witnesses

If there were witnesses to the verbal agreement, they can testify in court about what they heard and saw. This can be helpful in establishing the terms and conditions of the contract.

2. Correspondence

If there were emails, text messages, or other correspondence related to the verbal agreement, they can be used as evidence in court. However, they must be clear and unambiguous to be admissible.

3. Performance

If one party has already performed its part of the verbal agreement, this can be used as evidence that such an agreement existed. However, the performance must be consistent with the terms and conditions of the agreement.

Conclusion

While verbal agreements are not as secure as written contracts, they are still legally binding if they meet the requirements and standards set forth by the law. If you are considering entering into a verbal contract in Alberta, make sure you understand the risks and benefits, and seek legal advice if necessary. And always remember, a verbal agreement is only as good as the trust and honesty of the parties involved.