Are verbal contracts binding?

The short answer

• Spoken deals are contracts. Contract law doesn't require paper by default. A handshake agreement to paint a house or fix a fence is generally enforceable.
• Some deals must be written. Sales of land, promises to pay someone else's debt, agreements that can't be completed within a year and sales of goods for $500 or more are the usual examples. The exact list depends on your state.
• Proof is the weak point. If the two of you remember the price, the scope or the deadline differently, a court has only your word against theirs, plus whatever texts, invoices and payments back each side up.
• Writing can be electronic. Where a law requires a signed writing, an e-signed document satisfies it under the federal ESIGN Act and the state UETA laws.

When the law requires a writing

The statute of frauds is a rule, found in every state's code, that certain promises can't be enforced unless there's a note or memorandum of the deal signed by the person you're trying to hold to it. It doesn't make the oral deal illegal. It blocks a lawsuit to enforce it. Each state writes its own version, and the core list is similar from state to state:

• a contract to sell land, or an interest in it, and in some states longer leases;
• a promise to answer for someone else's debt, like a personal guarantee;
• an agreement that by its terms can't be performed within one year;
• an agreement made in consideration of marriage;
• a promise by an executor to pay an estate's debts out of their own money.

Courts in most states read the one-year rule narrowly: it reaches agreements that can't possibly be finished within a year, not long projects that simply happen to run over. A kitchen remodel scheduled for fourteen months is usually outside it, because nothing in the deal makes finishing sooner impossible.

Sales of goods: the UCC rule

Nearly every state has adopted some version of that Uniform Commercial Code rule. Florida's current text says "record" where the UCC's original wording says "writing". The same section lists exceptions: goods specially made for the buyer once the seller has started on them, a party who admits the contract in court, and goods that were paid for and accepted or received and accepted. Between merchants, a written confirmation the other side doesn't object to within 10 days can also satisfy it.

The real problem: proving the deal

Most verbal contract disputes aren't about whether a contract existed. They're about what it said. Was the price for the whole job or per square? Did it include hauling away the old roof? Was the start date a promise or a guess? Without a document, each side reaches for whatever evidence exists:

• texts and emails that mention the price, the scope or the schedule;
• a deposit, a check memo or a payment app note;
• an estimate the customer received, even if no one signed it;
• photos of the work and the order it was done in;
• people who heard the conversation;
• what each side actually did, such as a customer who watched the crew work for a week without objecting.

There's also a deadline problem. In Florida, for example, you have five years to sue on a contract founded on a written instrument but four years on one that isn't (Fla. Stat. § 95.11(2)(b) and (3)(j)). Other states draw the same line with different numbers.

Why contractors should get it in writing

For trades, a verbal deal carries risks beyond a fuzzy memory. Home improvement work is one of the most regulated kinds of consumer contract, and many of those rules assume a signed document exists.

• Required contract terms. Florida requires residential construction contracts above $2,500 to include a written notice about the state's homeowners' recovery fund, in wording set by statute (Fla. Stat. § 489.1425). You can't put a statutory notice into a handshake. See the Florida rules and Ohio rules for how two states handle it.
• Cancellation rights. In Ohio, every home solicitation sale must be a written agreement the buyer signs, with a notice of the buyer's right to cancel attached (Ohio Rev. Code § 1345.23). See three-day right to cancel.
• Lien rights. Your ability to file a mechanics lien depends on proving what you were hired to do and what you're owed.
• Changes. Extra work agreed on the roof is where most disputes start. A signed change order settles the price before the work, not after.

Turning a handshake into a signed agreement

You don't need a twenty-page contract to fix most of these problems. A one-page summary of the price, scope, start date, payment schedule and who's responsible for permits and cleanup, signed by both of you, does most of the work. It doesn't have to be on paper: under UETA, an electronic record satisfies a law requiring a writing and an electronic signature satisfies a law requiring a signature (UETA section 7), and the federal ESIGN Act says the same for interstate commerce.

With SignMaster, you can start from the estimate acceptance form or upload your own quote, add the customer's signature and date fields, and send it. The customer signs from an email link on their phone, without an account. You both get the signed PDF with a certificate of completion showing who signed and when.