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Enforceability concerns: Verbal contracts in Texas

On Behalf of | Feb 5, 2024 | Business Law

The Uniform Commercial Code (UCC) plays a pivotal role in shaping business transactions, and when it comes to verbal contracts in Texas, there are specific guidelines outlined within the UCC.

The UCC is a set of standardized laws that govern commercial transactions in the United States, providing guidelines for businesses to engage in trade. Enacted individually by each state, the UCC seeks to harmonize business practices, including contracts, sales and negotiable instruments.

Verbal contracts: Validity and enforceability

Under the UCC in Texas, verbal contracts are generally valid unless expressly required to be in writing. However, specific types of contracts, such as those involving the sale of goods over a certain value, may require written documentation to be enforceable. Businesses and individuals need to be aware of these nuances to help ensure the validity of their agreements.

In line with the UCC, Texas also follows the statute of frauds, which mandates written evidence for specific types of contracts. Understanding these categories, such as contracts exceeding a certain monetary value or those extending beyond a year, is crucial to navigating the legal landscape of verbal agreements.

Challenges and considerations in verbal contracts

Verbal contracts, by their nature, can be susceptible to misunderstandings and ambiguity. Parties involved should strive for clarity in verbal agreements to avoid disputes. While the UCC provides a framework, maintaining clear communication remains paramount.

To strengthen the enforceability of verbal contracts, parties may choose to create documentary evidence. This could include emails, text messages or any written communication acknowledging the terms of the verbal agreement. Such documentation can serve as a valuable support in case of disputes.

Understanding the nuances of verbal contracts in Texas under the Uniform Commercial Code is essential for businesses and individuals alike. By adhering to the UCC’s guidelines, parties can navigate the complexities of verbal agreements, enhance enforceability and minimize the risk of disputes.