Verbal agreements, also known as oral contracts, are commonly made in both personal and business settings. Whether agreeing to lend money, perform services, or engage in property transactions, many individuals rely on spoken words rather than formal documentation. Under Ontario law, verbal agreements are generally enforceable. However, enforcing such agreements through the courts presents significant evidentiary challenges. Without written proof, a party seeking enforcement must rely on other forms of evidence to substantiate their claims.

Are Verbal Agreements Legally Binding in Ontario?

In Ontario, the common law recognizes that verbal agreements can form legally binding contracts if they meet the core elements of contract formation: offer, acceptance, consideration, and the intention to create legal relations. However, under the Statute of Frauds, R.S.O. 1990, c. S.19, certain types of contracts must be in writing to be enforceable. These include agreements involving the sale of land or an interest in land, long-term leases, and guarantees, such as a promise to pay someone else’s debt. If these agreements are not in writing, they generally cannot be enforced, unless there is clear partial performance—actions taken by one party that are directly connected to the agreement and demonstrate reliance on it. This means that while many verbal agreements are enforceable, those involving land or guarantees require special consideration and may only proceed in court when supported by strong evidence of performance and intent.

The Evidentiary Burden

One of the most significant challenges in disputes involving a verbal agreement is the issue of proof. Courts require credible, persuasive evidence that a contract existed and that its terms were understood and accepted by both parties. Without a written contract, evidence may include:

• Witness testimony
• Emails or text messages that confirm the agreement or its performance
• Proof of partial performance (e.g., payments made or services rendered)
• Behaviour consistent with a contractual relationship

In these cases, the credibility of the parties becomes a central factor in judicial decision-making. Courts may be inclined to side with the party who can present a more coherent narrative supported by consistent documentation or corroborative witnesses.

The Role of Partial Performance

Partial performance can serve as a key indicator that a verbal agreement existed. For instance, if one party made payments or undertook obligations under the belief that a contract was in effect, this can support the enforcement of the agreement. However, partial performance must be unequivocally linked to the agreement in dispute.

Best Practices for Protection

To mitigate risks associated with verbal agreements, parties should consider the following practices:

• Promptly confirm terms of an oral agreement via email or text
• Request written receipts or acknowledgements of services or payments
• Avoid entering into high-stakes agreements without written documentation
• Preserve all communication that references the agreement or its performance

These proactive steps create a paper trail that may later be used to establish the existence and content of an oral contract, thus strengthening one’s position should litigation arise.

When Legal Assistance Becomes Essential

Navigating a dispute involving a verbal agreement requires a detailed understanding of both legal principles and evidentiary standards. MTS Paralegal Services offers guidance rooted in Ontario’s legal framework, helping clients build strong cases even in the absence of formal documentation. Whether the matter involves unpaid debts, unfulfilled service obligations, or verbal lease arrangements, the right legal approach can make a critical difference.

For tailored support in verbal agreement disputes, contact MTS Paralegal Services at https://mtsparalegalservices.com or reach out directly at 226.444.4882.