How legally binding is a verbal agreement with different understanding of “agreement” from both parties?

I was given an extremely neglected horse almost 2 years ago taking it only to try and make its life better. I ended up giving the horse away months later to a good home and the previous owners are threatening to sue because we supposedly had a “verbal” agreement legally binding me to give them the horse back. This never occurred. However they state they have a witness which can’t be true. There was no money gained or lost with exception of major feed farrier bills on my behalf for horse. What legal rights do they have?

Asked on December 14, 2011 under Bankruptcy Law, Tennessee


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Oral agreements are binding. If the two parties had different understandings of the agreement, courts will, in the event of legal action, first try to see if they can ascertain a common understanding, such as from any emails or other correspondence about the agreement. However, if that can't be done, and if the two parties truly entered into an agreement where each, in good faith, had a different understanding of it, the normal resolution would be to rescind the agreement--each party gives back what it received. However, when that can't be done--such as if one party no longer has the property it was given--then the court may require it to pay monetary compensation.

Note that if  you can show that the horse was given to you as a gift, then the previous owners would have no more claim to it--once a gift is given, it can't be "ungiven" without the recipient's consent (i.e. you could voluntarily choose to give it back). So showing, such as with testimony, that the horse was gifted to you may be your best bet, becaue if you can establish that it was a gift, that should cut off any claim by the former owners.

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