Oral Contracts in NSW: Determining their existence & terms

"Oral contracts are worth the paper they are written on."

This is an expression that many business people will be familiar with. While not technically true, the expression captures the real risk that parties take by failing to consolidate an agreement to writing.

A recent NSW Supreme Court decision, Hoju Jobs Pty Ltd [2021] NSWSC 302 (Hoju Jobs), the Court decision that gave life to this expression and confirmed the risks involved.

The dispute revolved around a claim for a refund of $300,000 after a failed business deal between the parties. The deal was not in writing and wholly oral. The conversations giving rise to the agreement occurred some 3-4 years prior to the litigation. Unsurprisingly, the parties' evidence showed numerous and irreconcilable differences between their recollection of those conversations and the agreement that was reached.