Is it normal to use a verbal agreement to sell real estate in North Carolina?

Is a verbal offer binding? An unconditional verbal offer becomes legally binding and enforceable on its acceptance, just like a written offer. However, certain offers, such as in a real estate sale or purchase, must be made in writing.

Is a Verbal Job Offer Binding?

• A verbal or oral job offer can form a legally binding contract if it's accepted by the applicant. The legal position doesn't change just because some important terms of the contract (salary, etc.) are not yet finalized or the applicant hasn't started working yet. A verbal offer in such cases is no different from a written job offer.
• If you accept a job which is offered to you verbally, you enter into a legally enforceable contract. Thus, if someone offers you a job over the phone and you accept it, you cannot go for another interview, accept another job and then reject the offer you already accepted. Likewise, the employer cannot unilaterally withdraw a verbal offer of employment unconditionally accepted by you.
• The job offer must be unconditional. If the offer is made subject to certain conditions, like medical checkup or references, a final agreement is not formed until the set conditions are fulfilled. Mere acceptance of a conditional offer does not constitute a valid contract.
• A verbal job offer, which is made and accepted formally, is legally binding on both the parties. However, it's a bit more complicated than a written agreement since you must establish the terms of employment at the time of the offer.
• Usually, in the case of a verbal offer, there is no witness or any other proof of offer or associated conditions. That's the reason it's usually followed by a written confirmation. The employer offers you a job, you accept it, the employer sends across an offer letter, finally, you accept the offer in writing and a written contract is formed.

Verbal vs. Written Job Offer

Although a verbal job offer is no different from a written offer, it's good to have at least some part, like the job description, in writing. Legally speaking, a job offer, whether verbal or in writing, is of no significance unless you have a contract of employment, since either of the parties can rescind such an offer.

Job application and hiring processes differ from company to company. One employer may hire an applicant on the spot, while another company may have a multi-step process spread over a period of several weeks.

However, irrespective of the company culture, it's always better to insist on a written job offer. It gives you peace of mind and confidence, especially for submitting your resignation in your current organization.

In a verbal job offer, the hiring manager and the prospective employee negotiate the salary, perks, job responsibilities and the reporting day, among others. In the age of background checks and employee verification, making and accepting a verbal job offer implies a good amount of trust between the parties.

A verbal job offer is more of an informal type in nature, usually with very few parameters to restrict the work environment. For example, there may be no provisions for periodic pay hikes and paid leaves.

In most cases, a written job offer made initially, is a conditional one. It requires the candidate to pass certain pre-employment steps, like a background check and past salary verification, before being handed over a final written offer. After finalizing the terms of employment, when the candidate signs the written offer, it's prudent for him to get a copy of the same with the employer's signature.

Without an employment contract, you may lose the job even before you start. This risk is higher in the case of a verbal job offer because the employer can deny that he offered you a job, especially if you don't have anything to prove your side.

Verbal Offer to Sell or Buy Real Estate

In most of the states including North Carolina, contracts to buy or sell a property or real estate must be executed in writing; verbal agreements in such cases are invalid. If there is another offer already accepted and signed by the seller, you may lose the property to another buyer. Similarly, unless you put down the verbal agreement on paper and get it signed by the seller, you cannot enforce the agreement, and the seller can accept another offer. It's up to the seller whether he chooses to honor or reject a verbal agreement.

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CRES ClaimPrevent Hotline was recently contacted by a client who wanted to know if an oral contract to sell land in California is enforceable.

One of our attorneys noted that in theory the sale of land can be accomplished:

• if you have a willing buyer and a willing seller agreeing to a sale of land for a set price even with no written contract between them, and
• if both agree to the sale under the oral terms, and
• if the seller and the buyer signed written escrow instructions for the oral transactions.

That’s a lot of ifs … and then what?

Why Real Estate Oral Contracts Don’t Work

The problem with oral contracts to sell land arises when the seller or the buyer then refuses to follow through on the oral agreement and close escrow. In this situation, the oral agreement is not enforceable as a general rule under California law.

The relevant law is California Civil Code section 1624, known as the “Statute of Frauds.” It states in part as follows:

(a) The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent:

(3) An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; such an agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged.

It’s not illegal to have an oral contract to sell land in California.  However, courts historically will not enforce oral real estate contracts where there is a dispute between the parties and a refusal to transfer title by a recorded deed unless there are unusual circumstances. Unusual circumstances where an oral contract has been enforced in California deal with issues of “equitable estoppel,” a legal tool which keeps one party from benefitting if they harmed another through misrepresentation.

The bottom line is: Real estate contracts must always be in writing in order to be enforceable.

While laws may vary from state to state, most states have a Statute of Frauds that applies. And in general, oral contracts are hard to prove and enforce, so it pays to have agreements in writing. Understand the laws around oral contracts and written contracts in your jurisdiction—and get it in writing.

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