Many of us will have heard of the nightmares that can often come hand in hand with verbal contracts. Seemingly harmless when they are first agreed upon, verbal contracts often become an issue when parties fall out, agreements fall through, or one party has misunderstood the other.
Yet verbal contracts still make quite a heavy appearance in the UK, often through self-employment. Deals are settled via phone calls or over coffee breaks.
Verbal contracts are legal in the UK, but in order for them to stand up in a court of law, there are several terms that should be agreed upon and completed, including:
So how does a court of law know who to believe when there is a dispute of a verbal contract? Understanding and confirming what has been agreed upon versus what has been given can often be a very complex task, which is why it is always better to have a written contract of employment or services in place.
Firstly, evidence will be looked for to confirm the existence of a verbal contract. This could include witness statements, emails to confirm the discussion, proof of payments, and meeting notes taken. Once these pieces of evidence have been provided in court, the judge is likely to use common sense to approach the final decision.
If you are planning to agree to a verbal contract with another party, whether you are self-employed or plan to be employed by this party, we recommend you don’t undertake this decision lightly, and you always request a written contract to follow the verbal contract as quickly as possible.
If you are thinking of opting for a verbal contract, we suggest you ensure the following points are discussed, agreed and recorded:
Once your verbal contract has been agreed upon, it is always best practice to make notes of the meeting and then follow it up with an email confirming all the points that were discussed and agreed upon.
Moving forward, if any changes are made to your verbal contract, this should be followed up with something in writing, preferably on the same email trail, so you can keep a note of the evolution of your agreement.
So far, everything we have talked about seems relatively straightforward when setting out a verbal contract. All you need to do is ensure everything that’s discussed is written down, and you are protected in a court of law. Unfortunately, verbal contracts are just not that simple.
When you agree to work for someone, particularly if you are employed, there are many more rights and responsibilities that are generally undertaken than the ones that have been pointed out in the list above. Employees often have working hours, bonus structures, holiday and sickness, restrictive covenants and many other things to agree to before starting work.
If you are starting on a verbal contract, the chances are not all of these points would have been covered, leaving you vulnerable if your employer decides to suddenly change your verbal contract.
As we have previously touched upon, if two parties have fallen out and a verbal contract is under dispute, often the case will go to court for an independent judge to review and make a final decision. This is not a path to be taken lightly, however. If both parties do not agree on what the other is saying, a judge will require evidence to understand what was agreed upon and what needs to be followed through.
But what if you don’t have the full agreement written down? What if you had a quick telephone call where something extra was requested but not confirmed in writing? It can be challenging to record every discussion you have; however, to ensure your verbal contract works correctly at all times; you must ensure this happens. This is why we recommend opting for a written contract of employment/services instead.
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If you are stuck in the middle of a dispute over services agreed upon, or you are sure your verbal contract is not fair, you may wish to consider speaking to a professional in the field of employment law.
Catherine Herries-Smith has over 25 years of experience in employment law, starting with a law degree, a diploma in Advanced Legal Practice and a diploma in Advocacy. Working on the side of both employers and employees has given us a unique insight into the world of employment law, and we are here to support all with their workplace disputes.
If you would like some advice about your verbal contract, or if you think your contract is not being followed correctly, get in touch with us today for some impartial advice on how to best handle your situation for the most appropriate outcome. We look forward to talking with you soon.
Address:Catherine Herries-Smith SolicitorJubilee House, Globe Park, Third Ave, Marlow SL7 1EY