Verbal Agreements in Canada: Understanding the Legal Implications

In Canada, verbal agreements are legally binding. But what does this really mean? Does it mean that you can simply shake hands with someone and make a deal without any written documentation? Not quite.

While verbal agreements may be binding, they can also be difficult to enforce. This is because it can be hard to prove what was agreed upon, especially if there were no witnesses or documentation to support the agreement.

In general, it is always better to have a written contract in place to avoid any confusion or misunderstandings. However, there may be situations where a verbal agreement is necessary or more appropriate. For example, if the transaction is relatively small and simple, or if the parties have a pre-existing relationship of trust.

In these cases, it is important to take steps to protect yourself and ensure that the terms of the agreement are clear and agreed upon by both parties. Here are some tips to keep in mind:

1. Be clear and specific: Make sure that the terms of the agreement are clearly defined and understood by both parties. This includes the scope of the work, timelines, payment arrangements, and any other important details.

2. Get it in writing: Even if you are relying on a verbal agreement, it is still a good idea to document the terms in writing. This can be as simple as sending an email summarizing the agreement.

3. Keep records: If there are any changes to the agreement, make sure to document them in writing and keep a record of all correspondence related to the agreement.

4. Consider legal advice: If the agreement is complex or involves a large amount of money, it may be worth seeking legal advice to ensure that your interests are protected.

In summary, while verbal agreements can be legally binding in Canada, they can also be risky. It is always better to have a written contract in place, but if a verbal agreement is necessary, make sure to take steps to protect yourself and ensure clear communication with the other party.