Business disputes may arise from conflicts involving contract terms. However, they might only be as valid as the existing contract. It should meet specific conditions to become enforceable, which usually varies depending on state law. In Texas, a valid contract can be a complex document or a simple promise between two parties, which can be verbal.
Texas law acknowledges the validity of verbal contracts, making them legally binding only under the right circumstances. This agreement type can be inappropriate and fail to hold legal significance if the transaction involves the following:
- Real estate purchases
- Lease agreements with durations exceeding one year
- Any contract for the purchase of products or services worth over $500
- Contracts involving royalties or oil and gas leases
- Other agreements that must be in writing based on the law
The components that make these contracts valid may also vary, depending on the nature of the transactions and other details. Sometimes, a verbal agreement can be enough to establish a deal, but having a written version can be beneficial.
No matter how informal, written contracts can be valid even if handwritten and drafted on a ripped page from a notebook. It might not be perfect, but it can support simple deals arising from verbal agreements.
Ensuring the contract is valid
A verbal contract may be enough for deals with little risk. If a business deal has much at stake, seeking legal counsel can be helpful. This transaction may require formal and extensive contracts with varying provisions to protect the involved parties. The process of drafting the agreement may be tedious, but it is necessary to ensure the contract is enforceable and legally sound.