Take care when entering a verbal agreement

Take care when entering a verbal agreement

A recent case has shown vividly that a spoken agreement can be enforceable when it comes to property rights – so it pays to be careful when entering an agreement, however informal it may appear at first sight.

When two men bought a house together in 1995, they agreed to pay an equal share of the mortgage. When one of them, Mr A, moved out in 1997, he agreed to sell Mr B his share of the property for £2,500 when Mr B could afford to pay him.

In 2000, after paying the mortgage on his own for some years, Mr B attempted to pay the money. Mr A denied the agreement existed, and claimed £50,000 as his rightful share. When the case came to court, the judge found in favour of Mr B, telling him to pay the original £2,500 as agreed to Mr A and awarding him the full value of the house.

As James Couzens of Parrott & Coales LLP says, “It is easy to assume that only written agreements have any standing when it comes to property rights – but as this case shows, verbal agreements too can have significant force. So we advise anyone to talk to a solicitor if they have any doubts about the validity of an agreement.”