Are Oral Contracts Enforceable in California?

Oral contacts in businesses are indeed enforceable and binding in California. The party insisting that an oral contract existed must show by witnesses or documents such as text messages, emails, receipts, or that something was done that benefited the breaching party.

Are Oral Contracts Enforceable in California?

Many believe that parties must write their contracts down before they can be honored. While it is true that some contracts must be written to be valid, oral contracts also exist in California.

Ted and Bill are old friends from college who text each other about sports and other hobbies occasionally. Nowadays, Bill and Ted do not see each other as much as they used to—they both live in Solana Beach, California, but they also have busy professional lives and large families. The two men have grown apart over the last 20 years but still like to catch up occasionally.

Ted is selling off some of his favorite belongings to save money for his children’s college funds. One day, Bill sees a picture of some of Ted’s prized sports memorabilia on Facebook. He texts Ted and asks him if he can buy his vintage Tom Brady Patriot’s Jersey, which is autographed and in great shape.

Ted texts Bill back and agrees to sell him the jersey, which is supposed to come with an official certificate of authenticity. Bill sends Ted a payment via PayPal for $3 thousand, and a week later, the Patriots jersey arrives at Bill’s door.

However, when Bill inspects the jersey, he finds it is a fake. There is no certificate of authenticity, and the knockoff is not even a Tom Brady jersey.

Frustrated, Ted calls and texts Bill, but Bill does not write back. The two old friends did not exchange or sign a written contract for the sale, and Ted wonders what he can do to recover the money he spent. What is Ted’s path to recourse?

Placing contracts in writing makes sense for a variety of reasons. When two parties sign a written contract for a deal or a sale, certifiable proof of the deal exists. However, it is essential for all parties involved to understand that some oral contracts are enforceable in California. On the other hand, there are also contracts that people must write down. California’s uniquely named Statute of Frauds lists the categories of contracts that parties must write down.

What Is California’s Statute of Frauds?

In California, the Statute of Frauds lists the types of contracts that must be written or recorded to be enforced. These contracts include agreements for:

The sale of personal property for more than $5,000
The sale of real estate
A service that is unable to be performed during the lifespan of the person who promises to perform it
A property mortgage
A sale of goods over $500
A real estate sale or lease for longer than a year involving an agent or broker as a third party
Answering the debt or default of another person
A contract that cannot be finished in one year (for example, a job lasting 18 or 22 months)
Lending over $100,000 or providing the same amount of credit, not used for household, family, or individual expenses

Alternate contracts may be enforceable even if the parties only recorded them orally. However, it can be challenging to prove that the oral contract existed. Before filing a lawsuit for breach of contract in California, a party must satisfy the statute of fraud.

Returning to the example of Bill and Ted, the payment for the jersey was less than $5 thousand, and neither Ted nor Bill drew up a contract for the sale. However, the two men texted back and forth about the sale. Since Bill will not respond to Ted, Ted contacts an experienced contract attorney for help with the matter.

Are There Exceptions to the California Statute of Frauds?

If two parties make an agreement but do not both sign a contract, there exist other ways to enforce the agreement. In California, an individual may be able to legitimize the contract if:

One party admits to the oral contract in court testimony or pleading.
Texts or phone records illustrate the contract.
The party who has not enforced the contract sends written proof of the contract.
The party trying to enforce the contract sends written proof within five days without any written objection.
There is evidence of electronic communication, such as a text or call, that points to the existence of the contract.

When Should Individuals Contact an Attorney About Oral Contracts?

Ted’s attorney used the text messages between the two men as evidence and was able to settle with Bill and Bill’s lawyer. Unfortunately, Ted and Bill are no longer friends, and Ted is still on the lookout for a vintage Tom Brady Patriots jersey.

Oral contracts often challenge the parties who use them but are enforceable in the specific situations outlined here. However, using a written contract whenever possible makes sense to avoid disagreements and other conflicts. Generally, when entering any type of deal or contract with another party, individuals should take care and make careful decisions. For example, Ted should have used more care regarding his purchase, but Bill should not have taken advantage of his old friend in such a dishonest manner.

For help with your own oral and written contracts and all other questions, contact the experienced attorneys at Nakase Wade in California.

Best Free Payroll Software for Small Businesses and Startups in 2025

Find the best free payroll software options for small businesses and startups in 2025 with essential tools and flexible features. Compare user-friendly platforms offering global payments, tax calculations, employee portals, and cloud access at no cost.

What Services Does a California Business Lawyer Provide?

A California business lawyer helps protect your company by providing legal guidance on structure, taxation, contracts, and compliance. Their services ensure you avoid costly mistakes and navigate disputes, allowing you to focus on growth.

Where Can I Find a Business Lawyer?

Find a skilled business lawyer to navigate legal matters like contracts, trademarks, and liability issues. Protect your company with expert legal advice and support.

What Are the Requirements for a Business Contract Termination Letter?

A contract termination letter must clearly state the reason for termination, reference the original contract, and follow required notice procedures. Ensuring proper documentation and adherence to contract terms helps prevent legal disputes and wrongful termination claims.

Are Verbal Contracts Binding in California?

A verbal contract can be legally binding in California, but proving its terms in court is often difficult. Written agreements provide stronger legal protection, reducing risks of disputes and misunderstandings.

Where Can I Find a Business Lawyer Near Me?

Find a business lawyer by seeking referrals, researching credentials, and ensuring they specialize in your industry’s legal needs. Schedule consultations to assess their expertise, compatibility, and pricing structure before making a final decision.

What Is the Statement of Information and When Is It Required?

A Statement of Information is a required filing for California corporations and LLCs, providing key business and leadership details. Filing deadlines vary, requiring annual or biennial submissions to maintain compliance and avoid penalties.

What Is Indemnity and How Does It Apply to Insurance Contracts?

Indemnity protects individuals and businesses from financial loss by ensuring compensation for damages under legal agreements, including insurance contracts. Various indemnity policies cover liability, property damage, and professional risks, with terms defining coverage limits and exclusions.

What Is Gross Profit and How Is It Calculated in Financial Statements?

Gross profit represents the revenue remaining after deducting the cost of goods sold, helping businesses assess production efficiency and pricing strategies. Calculating gross profit involves subtracting direct expenses from revenue, providing insights into cost control and financial performance.

What Is Gross Income and How Does It Differ From Net Income?

Gross income includes all earnings before deductions, while net income is what remains after taxes and expenses. Understanding these figures helps determine tax obligations, loan eligibility, and overall financial health.

What Is Beneficial Ownership Information and Why Is It Important for Compliance

Beneficial ownership information helps prevent financial crimes by increasing transparency in corporate structures. Businesses should stay informed on reporting requirements to avoid penalties and ensure compliance with evolving regulations.

What Is Arbitration and How Does It Resolve Disputes?

Arbitration resolves disputes by allowing a neutral third party to make binding decisions, offering privacy and efficiency over traditional litigation. Businesses and individuals prefer arbitration for its speed, cost savings, and adaptability, ensuring enforceable outcomes across various legal frameworks.

What Is a Corporation, and How Does It Differ From an LLC?

A corporation is a separate legal entity owned by shareholders, while an LLC offers flexible management and pass-through taxation. Corporations require stricter compliance and structured oversight, whereas LLCs provide fewer formalities and adaptable ownership structures.

How Do You Incorporate a Business, and What Are the Benefits?

Incorporating a business creates a separate legal entity, protecting personal assets and offering potential tax advantages. This process enhances credibility, simplifies ownership transfer, and provides growth opportunities while requiring compliance with specific regulations.

How Do You Get an LLC, and What Are the Benefits of Forming One?

An LLC provides liability protection, tax flexibility, and management freedom for business owners. Follow seven simple steps to establish one efficiently.

How Do You Start a Business, and What Are the Legal Requirements?

Starting a business in California requires careful planning, legal compliance, and financial preparation. From selecting a business structure to obtaining permits, tax registration, and funding, each step is crucial for long-term success.

How Do Accrual Accounting and Cash Accounting Differ in Financial Management?

Accrual accounting records transactions when they are earned, while cash accounting records them when money changes hands. Choosing the right method impacts taxes, financial planning, and cash flow management for businesses.

Do I Need a Permit to Operate a Vending Machine?

A vending machine business requires permits, including a business license, EIN, and compliance with state and federal regulations. Proper location approval, ADA compliance, and product labeling are essential for legal operation and profitability.

Are There Grants Available to Start a Business?

Government and private grants provide funding to help entrepreneurs start businesses, with eligibility varying by industry, location, and business type. Opportunities include federal programs, state initiatives, and private grants supporting startups, research, and minority-owned businesses.

What Is a Stock Corporation in California – General Requirements?

A stock corporation in California raises capital by selling shares, granting investors ownership and voting rights while maintaining limited liability. These corporations, classified as C or S, follow specific legal steps, including filing Articles of Incorporation and drafting corporate bylaws.

Is a Contract Valid Only if It Is in Written Form?

A contract can be legally binding whether written or verbal, but some agreements, such as real estate deals, require written documentation. A valid contract must include clear terms, mutual agreement, legal capacity, consideration, and intent to create enforceable obligations.

What Is a Cash Receipt and Why It Matters for Business Transactions

A cash receipt records the exchange of cash during a transaction, detailing the amount, parties involved, and purchase specifics. Maintaining accurate cash receipts supports tax reporting, financial management, and dispute resolution while ensuring compliance with audits.