Are Verbal Agreements Binding in Maryland?

Written contract

Verbal agreements, or verbal contracts, are considered "common law" contracts and are legally binding in Maryland --- given some specific provisions. While verbal agreements are binding in most cases in Maryland, they can be difficult to uphold in a court of law without witnesses.

Elements

For a verbal agreement to be binding in Maryland, it must fulfill three elements. First, both parties must indicate their intent to enter into the contract. Second, the person to whom the contract is being offered must accept the terms of the contract. And third, both sides must exchange something of value. Additionally, a verbal agreement made in Maryland must provide a clear definition of a breach of contract, and offer an appropriate means of restitution.

Limitations

In Maryland, verbal agreements are as binding as written contracts, with some exceptions pertaining to Maryland's "statute of frauds". According to Maryland's statute of frauds, if more than $500 worth of goods is to be exchanged, the parties must put the details into a written contract, which then must be signed. Verbal agreements in Maryland are also not binding if they govern actions which take longer than one year to complete.

Issues

Verbal agreements are easily contested, particularly without impartial witnesses. It is best to consult with a legal professional before entering into a verbal agreement in Maryland.

References

• Peoples-Law: Baltimore Neighborhood Inc. "Lease Can Be Oral or Written"
• Maryland Contract Lawyers.com: "Authority And Responsibility To Contract For Authorized Supplies And Services Are Vested In The Agency Head"
• Warfield and Darrah, PC: "Oral Contract Between Developers Too Indefinite to be Enforced"
• Bowie and Jensen: "Caution: Some Oral Agreements Are Enforceable Contracts"
• Maryland Commercial Law Section 19-101
• Maryland Real Property Section 8-203