Is a verbal agreement legally binding?

Question

Accepted Answer

Yes — in most cases a verbal (oral) agreement is legally binding in Arizona. Arizona's statute of frauds requires a signed writing only for certain specified categories of agreements; outside those categories, no writing is required to bring a court action on an agreement .

Your oral agreement would not be enforceable, however, if it falls into one of the categories Arizona law requires to be in writing and signed by the party against whom it is enforced, including :

- A promise to answer for the debt or default of another person (a guaranty) 
- A contract for the sale of goods valued at $500 or more, unless the buyer accepted and received part of the goods or gave partial payment or earnest money  (the Uniform Commercial Code provision governing sales of goods similarly requires a writing for goods priced at $500 or more, subject to exceptions such as specially manufactured goods, an admission in court that a contract existed, or goods already paid for or received and accepted) 
- An agreement that by its terms cannot be performed within one year of being made 
- A lease for longer than one year, or a sale of real property or an interest in it 
- An agreement employing an agent or broker to buy or sell real property or mines for a commission 
- An agreement not to be performed during the promisor's lifetime, or to leave property by will 
- A commitment to lend or extend credit over $250,000 that is not primarily for personal, family, or household purposes 
- A promise by an executor or administrator to pay estate debts out of their own pocket, or an agreement made in consideration of marriage

Additionally, certain specific agreements have their own writing requirements under Arizona law — for example, a premarital agreement must be in writing and signed by both parties to be enforceable , and a contract for discount buying services must be in writing and is not effective unless dated, signed by the buyer, and accompanied by the required cancellation notice .

The practical upshot for your situation: if your oral agreement does not involve real estate, a commitment lasting over a year, a guaranty of another's debt, a sale of goods at or above the threshold described above, or one of the other listed categories, the writing requirement does not bar a court action on it .

Whether your particular agreement falls within one of these categories depends on its specific terms; if you are unsure how these rules apply to your agreement, a licensed Arizona attorney can advise you.