Is a verbal contract binding?
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Is a verbal contract binding?
My boss changed me from wages to a bid-for-work system so that he wouldn’t have a payroll because there wasn’t enough work. Based on his guidance, I registered and got my own corporation. It was a risk on my behalf since work was not guaranteed. After agreeing to this, business started picking up and since I was being paid by square footage, I stood to make more than I would have on wages. Upon realizing how much I was going to make he decided to revert back to wages. I didn’t accept the new terms. He told me not to come in for the week and after, he let me go. Can I sue my boss for breach of contract?
Asked on September 28, 2011 under Employment Labor Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Verbal contracts (more properly called "oral contracts"--verbal just means "in words," which includes written contracts, while "oral" means spoken) are enforceble; of course, it can be more difficult to prove both their existence and their terms, since it often comes down to one person's work against another. Still, if you assume you can prove the contract, it is enforceable as per its terms...though that means that if work was not guaranteed to you, there may be nothing to enforce.
Another tact to consider is what's called "promissory estoppel": if, in reasonable reliance on another party's promises or representations, you take actions to your detriment (like renting space, buying equipment, paying money to incorporate) and the other party knew or should have known you would do this, that "detrimental reliance" may make the promise binding.
Since so much depens on the exact facts, precisely what was said, etc., you should consult with an attorney who can evaluate the situation and your rights with you.
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