A handshake deal can be a contract in California. The harder question is often proving exactly what the parties agreed to.
California Civil Code section 1622 provides that contracts generally may be oral unless a statute specifically requires a writing. But an oral agreement still has to satisfy the ordinary requirements for formation of a contract, including mutual consent.
When Does a Contract Have to Be Written?
There are important exceptions. California’s statute of frauds, Civil Code section 1624, requires certain agreements to be in writing. Among them are agreements that, by their terms, cannot be performed within one year and certain agreements involving interests in real property.
So the fact that two people reached an oral agreement does not necessarily mean the agreement is enforceable.
How Do You Prove What Was Said?
Oral-contract cases frequently turn on evidence created before the lawsuit.
Emails and text messages may refer to the agreement. Invoices, payments, business records and the parties’ performance may help establish what they understood the deal to be. Third-party communications can sometimes show how the parties described their relationship before a dispute arose.
The important question is usually not simply whether somebody remembers a promise. It is what evidence exists to establish the agreement, its terms, performance and the alleged breach.
The enforceability of an oral agreement depends on its particular terms and circumstances. Statutes of limitation and other defenses may also apply.
Authorities: Cal. Civ. Code §§ 1565, 1622, 1624.
Related practice areas: Civil Litigation · Corporate Governance & Shareholder Disputes