When a Verbal Agreement Becomes a Legal Nightmare: How Courts Handle ‘Handshake’ Deals

When a Verbal Agreement Becomes a Legal Nightmare: How Courts Handle ‘Handshake’ Deals

Many business owners assume that a deal sealed with a handshake or an email exchange is “good enough”—until it isn’t. In commercial litigation, courts in New York and New Jersey often see verbal agreements unravel, turning once-trusted relationships into bitter disputes.

Are Verbal Agreements Legally Binding?

Yes—sometimes. In both NY and NJ, verbal contracts can be enforceable if they contain all the required elements of a contract: offer, acceptance, consideration, mutual intent, and definite terms. However, the burden of proof is much higher when the terms aren't in writing.

When Verbal Agreements Fail in Court

Courts often dismiss verbal contract claims due to lack of specificity, conflicting testimonies, or violation of the Statute of Frauds, which requires certain agreements—like real estate or multi-year contracts—to be in writing.

Common Disputes Over 'Handshake' Deals

• Business partnerships formed without clear terms
• Unwritten promises to pay commissions or bonuses
• Misunderstandings over deal scope or duration
• Failure to perform “oral” service contracts

How to Protect Your Business

To avoid costly litigation, reduce all agreements to writing—even if it’s just a confirmation email. Include payment terms, deadlines, responsibilities, and any contingencies. If necessary, use a short-form agreement until a full contract is ready.

Need Help Enforcing or Defending a Verbal Contract?

At JDE Law Firm, PLLC, we’ve successfully resolved dozens of breach of contract cases—both written and oral. Don’t wait until a handshake deal becomes a legal nightmare. Contact us today to protect your business.