Shut your mouth! When can a conversation become an enforceable
contract?
Contracts or agreements are everywhere and are part of the
day-to-day way of doing business, whether to sell a product, a
service or even run a charity.
In May 2015, the Supreme Court of NSW handed down a decision
reminding us all that a verbal agreement can be enforceable. In
this decision, the facts involved a group of companies held by
various family members. A dispute arose about some of the
companies' debts and whether other companies in that group
would help pay off some of the debt. In coming to an agreement, two
parties agreed verbally on a bail-out deal. When one of those
parties tried to enforce the agreement, sadly both the other party
and his solicitor had died, so there was uncertainty as to what was
actually said and what the parties actually intended and this made
it hard to gather evidence.
