Oral Contract


DEFINITION of 'Oral Contract'

A type of business agreement that is spoken, not memorialized in writing. Although it can be difficult to prove the terms of an oral contract in the event of a breach, this type of contract is legally binding.

BREAKING DOWN 'Oral Contract'

A famous example of the enforceability of an oral contract occurred in the 1990s when actress Kim Basinger backed out of her promise to star in Jennifer Lynch's film "Boxing Helena". A jury awarded the producers $8 million in damages. Basinger appealed the decision and later settled for a lower amount, but not before having to file bankruptcy.

Oral contracts are often mistakenly referred to as verbal contracts, but a verbal contract is really any contract since all contracts are created using language.

  1. Contract Logistics

    The outsourcing of resource management tasks to a third-party ...
  2. Implied Authority

    An agent with the jurisdiction to perform acts which are reasonably ...
  3. Amendment

    1. A change to one of the terms of a contract. Any type of contract ...
  4. Breach Of Contract

    Violation of any of the agreed-upon terms and conditions of a ...
  5. Assignable Contract

    A futures contract with a provision permitting the contract holder ...
  6. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
Related Articles
  1. Retirement

    Bankruptcy Protection For Your Accounts

    Will the plan assets you've worked hard for be safe if you experience a personal financial crisis?
  2. Personal Finance

    How To Pick The Right Lawyer

    Find out what factors to consider before hiring an attorney.
  3. Home & Auto

    Protect Your Company From Employee Lawsuits

    Understanding employment practices liability insurance is easy, once you know the basics.
  4. Bonds & Fixed Income

    What is an Indenture?

    An indenture is a legal and binding contract between a bond issuer and the bondholders.
  5. Term

    What are Mutually Exclusive Events?

    In statistics, mutually exclusive situations involve the occurrence of one event that does not influence or cause another event.
  6. Entrepreneurship

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  7. Entrepreneurship

    10 Public Companies That Rely On Govt. Contracts

    We look at 10 of the top public companies whose businesses rely on U.S. government contracts.
  8. Economics

    How Does an Operating Lease Work?

    Operating lease is a term used mostly in accounting to denote a lease that gives the lessee rights to use and operate an asset without ownership.
  9. Entrepreneurship

    Lockheed Martin Is Tight With The US Government

    The relationship between Lockheed Martin and the U.S. government is long-standing and the company's biggest revenue source, but it may be deteriorating.
  10. Home & Auto

    ‘Turnkey’ Properties: A Sensible Investment?

    Turnkey properties can make sense - for people who want a real estate investment without truly being in the real estate business.
  1. Are waivers of subrogation clauses ever ineffective in preventing a third-party lawsuit?

    Sometimes waiver of subrogation clauses are ineffective at preventing a third-party lawsuits. In determining who is responsible ... Read Full Answer >>
  2. What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  2. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  3. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  4. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  5. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
  6. Discount Bond

    A bond that is issued for less than its par (or face) value, or a bond currently trading for less than its par value in the ...
Trading Center