Can a Verbal Promise Be Legally Binding in the UK?

A verbal promise can indeed be legally binding if it meets all the essential elements of a contract. The courts in the UK have consistently upheld the enforceability of verbal contracts provided they contain the following elements:

Offer and Acceptance
Agreed Terms
Intention to Be Legally Bound
Consideration
Free Consent
Legal Capacity

Let’s break down what this means in practical terms, backed by case law.

Offer and Acceptance

For a verbal promise to constitute a contract, there must be a clear offer by one party and acceptance by the other. For instance, in a casual conversation:

Groom: “Would you play the guitar at my wedding for one hour? I’ll pay you £100.” Musician: “Sure.”

In this scenario, the groom’s proposal is an offer (payment of £100 for a service), and the musician’s response is the acceptance. In Storer v Manchester City Council [1974] 1 WLR 1403, the court held that a binding contract is formed when an offer is clearly accepted, demonstrating that clarity and mutual consent are crucial.

Agreed Terms

The parties must agree on specific terms. In our example, the musician and the groom agree on details like the provision of equipment, timing, payment method, and parking arrangements. These are the terms of the contract.

In the case of Foley v Classique Coaches Ltd [1934] 2 KB 1, the Court of Appeal confirmed that as long as the essential terms are agreed upon, the contract is enforceable, even if some details remain to be finalized later.

Intention to Be Legally Bound

Both parties must intend for their agreement to be legally binding. The courts will not enforce promises made in jest or casual remarks without serious intent, as seen in the case of Blue v Ashley [2017] EWHC 1928 (Comm). In this case, the High Court ruled that a conversation in a pub about potential bonuses lacked the necessary intention to create legal relations.

Using our example, the groom and musician clearly intend to create a legally binding agreement, unlike a scenario where someone casually promises a trivial favor, which may not be enforceable.

Consideration

Consideration refers to something of value exchanged between the parties. It is a fundamental requirement for any contract. In our example, the musician provides a service (playing at the wedding), and the groom offers payment in return.

The House of Lords, in Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87, reinforced that consideration does not need to be adequate, but it must be sufficient. This means that as long as something of value is exchanged, even if it’s minimal, the contract is valid.

Free Consent

For a contract to be enforceable, both parties must enter into it freely and willingly. If consent is obtained through duress, coercion, or undue influence, the contract may be voidable.

In Williams v Bayley [1866] LR 1 HL 200, a contract was set aside because it was found to have been entered into under undue influence. The courts maintain that consent must be given freely for a contract to be valid.

Legal Capacity

Finally, the parties must have the legal capacity to enter into a contract. This means they must be of sound mind, not under the influence of drugs or alcohol, and of legal age. Special rules apply to minors, mentally impaired individuals, and bankrupts.

In Hart v O’Connor [1985] AC 1000, the Privy Council held that a contract entered into by a mentally impaired person is voidable if the other party knew of the impairment and took advantage of it. Similarly, under the Family Law Reform Act 1969, contracts with minors are generally voidable unless they are for necessaries.

Conclusion

When we engage in everyday conversations, we may inadvertently make promises that satisfy the basic elements of a contract. Whether these promises become legally binding depends on various factors, such as the clarity of the terms, the intention behind the agreement, and the legal capacity of the parties involved.

Understanding these elements, supported by relevant case law, can help you navigate the complexities of verbal agreements and ensure that your promises hold up in court if needed.