Is an oral contract binding?

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Is an oral contract binding?

My car was hit by an insured driver. His insurance vowed to pay in full for my damages and found me at no fault. They did not pay in full. I have recorded on my voicemail messages that the insured himself said he would pay the rest of the repairs. He then retracted and said he wouldn’t. I want to sue him for the rest of the payment.

Asked on March 28, 2012 under Accident Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

First, be glad you live in New York: New York is a "one-party consent" state vis-a-vis wiretapping, so recording the other insured without his consent is not actually a crime, as it might have been, depending on the exact circumstances, in certain other states.

Second, oral agreements are generally enforceable; the usual issue with them is proving them, if the two parties to the agreement disagree about what was said--though having a taped converstation will certainly help you prove your case.

However, a promise to pay is not necessarily an enforceable oral contract: for there to be a contract, not only must there be a promise, but there must also be "consideration," or an exchange of something of value. You would have needed to have offered the other party something of value in exchange for him promising to pay to make his promise into an enforceable agreement.

Overall: you can try to sue on the oral agreement, but unless there was consideration for it, it may not be enforceable. If you believe the driver was at fault in causing the accident and your losses, you could also sue him for his negligent damage of your property (ignoring the agreement, or if the agreement is found not enforceable). As a practical matter, it's generally best to sue on every plausible ground, then let the court sort it out.


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