Oral Contracts In North Dakota

Are Oral Contracts Enforceable In North Dakota? Yes, For The Most Part…

October 10, 2019

You and your friend Joe get together to have lunch after a long work week. During the conversation, you mention how you really want to buy a snowblower before the snow begins to fall. Fortunately for you, Joe knows someone who has been trying to sell their snowblower.

You meet up with Joe’s friend, inspect the snowblower, and offer to buy it from him for $400. He agrees. You tell Joe’s friend that you are going to get some cash from the bank and that you will be right back to make the exchange. On your way back from the bank, Joe’s friend calls you and tells you the deal is off because someone else offered him $450 for the snowblower.

Now you’re wondering if the oral contract you made with Joe’s friend for the snowblower is enforceable. Well, this blog may have good news for you.

Elements Of Oral Contract

Oral contracts are valid and enforceable in North Dakota, as long as they meet the requirements of a valid contract and the requirements of the Statute of Frauds.

For both oral and written contracts, a contract is enforceable as long as the elements are met. A valid contract is typically composed of: (1) an offer, (2) acceptance, and (3) consideration. To be able to enter into a contract in the first place, the parties must be capable of forming a contract. They must be of sound mind and over the age of 18. Once the ability to contract has been established, the contract can be analyzed to determine if it meets the required elements.

  • An offer is an invitation to bargain. In our example, you offered Joe’s friend $400 in exchange for his snowblower. This would be considered a valid offer.
  • Acceptance is valid if the parties consent to enter into the contract and agree to its terms. When Joe’s friend said that he accepted your $400 offer, this constituted a valid acceptance of the contract.
  • Consideration is the exchange of something for value. Here, there is a consideration because you offered Joe’s friend $400 for his snowblower. Both of these objects, $400 cash and the snowblower, have an ascertainable value.

Statute Of Frauds

Contracts must also meet the requirements of the Statute of Frauds. Certain contracts must be in writing dependent on the type of contract it is. Under the Statute of Frauds, in North Dakota a contract must be in writing for:

  • Agreements that are not to be performed within one year of the agreement,
  • A promise to answer for the debt of another,
  • A real estate lease for longer than one year,
  • A real estate sale,
  • A loan of $25,000 or more, or
  • An agreement to alter the terms of a debt that is worth $25,000 or more.

If a contract falls under one of these categories and it is not in writing, it will most likely be invalid, and thus, unenforceable.

In our example, your contract with Joe’s friend survives that Statute of Frauds and is not required to be in writing because the oral contract for the snowblower does not fall under any of these categories. Therefore, the oral contract is valid and can be enforced against Joe’s friend.

Contact Our Law Firm

If you are questioning whether or not a contract you have entered into is enforceable, you need an agreement reduced to writing, or you need to enforce the terms of an oral agreement, contact our team at SW&L by calling 701-297-2890 or send us an email below.

The information contained in this article and on this website is for informational purposes only and not for the purpose of providing legal advice.