The business world in Tennessee operates on contracts, which, in their most basic terms, are legally enforceable agreements whereby each party promises something to the other. The best practice is to commemorate these agreements in written form, so that there is no confusion as to each party’s obligations. Yet, there may be instances where a verbal promise becomes legally enforceable. Sometimes silence can even constitute an agreement.

The determining factor when it comes to the enforceability of a verbal promise is usually detrimental reliance. So, for example, if a party promises to sell goods for a certain price and a buyer foregoes a contract with another seller in reliance on that promise, and financial harm results, then a contract may be found to have been created amongst the parties. It is worth noting, though, that for enforceability to be realized the detrimental reliance must be reasonable and foreseeable to the party that made the verbal promise.

However, there are several legal challenges when it comes to dealing with these situations. Most notable is the fact that since these promises are verbal there is no record of the promise ever being made. Therefore, these cases sometimes turn into a he-said-she said situation. A wronged party needs to be diligent in handling these matters by seeking out any supporting documentation and witness accounts, if any can be found.

Contractual disputes abound in the business world, including those involving verbal promises. Those who are confronting one of these disputes need to do everything they can to protect themselves, as a significant amount of money and goodwill, as well as one’s reputation, may be on the line. Fortunately, a skilled business law attorney may be able to help build compelling legal arguments that result in a favorable outcome, whether through negotiation or business litigation.