Jurisprudence On Oral Agreement

11 Dec

An oral agreement is as valid as a written agreement. The legality of an oral agreement cannot be questioned if it falls within the indecency of the requirements of paragraph 10 of the Indian Contract Act of 1872. In a recent article, I wrote about the circumstances in which the courts imposed both legally binding declarations of intent. Since then, a Delaware decision has highlighted the circumstances under which the courts will apply oral agreements – and suggests that the old saying “an oral contract is not worth the paper on which it is written” is no longer true. 6 The defendant argues that the evidence relied upon by the applicant in establishing the so-called contract is not sufficiently clear, conclusive and binding to introduce it into the rule applicable to certain cases of oral contract benefits. Sarissa sued Innoviva in Delaware Chancery Court to enforce the terms of the transaction. The Court found that there were two essential elements for the performance of the oral contract: the Supreme Court recognized in its decision the potential for injustice in cases where a party relied on an oral amendment but was unable to apply it. The protection in these cases lies in the different teachings of the Estoppel. An oral contract is a contract whose terms have been agreed upon by oral notification. This goes against a written contract, which is a written document. There may be written or physical evidence of an oral contract – for example, if the parties write what they have agreed – but the contract itself is not a written contract. While the Supreme Court`s decision was unanimous, Lord Briggs gave several reasons. While Lord Sumption considered that it was not possible to change a contract orally where there was an oral non-modification clause, Lord Briggs considered that the parties were considering amending a contract orally in cases where the parties express themselves explicitly on the non-oral clause (if they are able to agree orally on a contract).

In his view, an oral non-amendment clause “remains binding until all parties have expressly agreed (or by a strictly necessary implication) to abolish it”; an argument in favour of the predominance of party autonomy. However, Lord Briggs was in the minority. If it had been necessary to involve a warrant, the Supreme Court would not have hesitated to do so. Applying its own decision in Marks and Spencer / BNP Paribas – that a clause is implied only when it is necessary to give effect to a contractual transaction or so obvious that it would be “obvious” – the Tribunal found that the obligation to pay the commission once completed was all that was necessary to give effect to the agreement between Devani and Wells.