In Singapore, an agreement which is achieved by signing a contract is the norm and so too, the standard practice worldwide. You know that you are legally bound by the terms and conditions stated on the contract.

It is imperative that you know what you are signing for. You should read every line, even the fine prints as some terms are included in the fine prints as some are not cautious enough or rather lazy to read all the terms in a contract.

Be it an employment agreement, a renovation agreement, rental agreement or any agreement that requires you to pen down your signature, requires your attention to details stated on the contract.

But what if the agreement is not written? The agreement was made verbally during a meeting or through the telephone. Can you sue based on that oral agreement that you have made with the other party? 

Yes, however proving an oral agreement can be difficult. A contract can certainly be entered into orally, provided all the elements of a contract is satisfied.

They are namely as follows: that an offer has been made and accepted, there was consideration (i.e. some form of quid pro quo) and that there an intention between the parties to enter into legal relations.

The trouble with oral agreements is that it can be difficult to prove. However, this does not mean that oral contracts cannot be proved as it is possible to adduce witness testimony to try to support the existence of an agreement, as well as the conduct between parties. 

An oral agreement can also sometimes be proven to exit based on documents generated subsequently, such as correspondences that may suggest or references to the existence of an agreement.

In general a contract contains several elements, namely:

  • An offer
  • Acceptance
  • Consideration
  • Mutual agreement

Typically, when you are in a discussion and exchanging ideas, something must be written down to show understanding and also for the purpose of the discussion. Both parties would have something written down, but it is just that the contract is not done up and signed yet.

Email exchanges or text messages following that discussion can be used as proof to build the case and as evidence to enforce the oral contract.

In summary, whenever you come across or entered a verbal agreement with another party, it is best to document it down as a proper agreement containing the elements mentioned above.

It can be a simple document stating the intent, what is being offered and whether you and the other party both agree to what is written and sign off on the document.

A good example is when a friend of yours wants to borrow your car for a weekend trip. In this instance, while lending your car may seemed harmless, there may be unforeseen circumstances like damages due to wear and tear or even a minor accident.

What may complicate things in the future is the cost of damages to your car. You may be able to look the other way if the damages amount to a few hundred dollars. But what if the damages amount to a few thousand dollars? Even your future insurance premium will be affected.

With a written agreement signed by both parties, the chance of you having a dispute will be lesser. Do cover pointers like wear and tear of vehicle parts. Document whether is there any current damages or scratches.

This is to safeguard both parties should a dispute arise in the future. With a documented agreement inclusive of photographs, it is easier to bring up to court of law if need be.

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