Oral Contract

An oral contract is made by the verbal mutual consent by two or more parties to the performance of clearly stated promises. A contract does not have to be in writing. The glue that binds promises can either be the performance of promise bargained for or the payment of money, this is called consideration. In employment, a company can create oral promises with their employees that can transform the employment from one at-will to a contract for a term for years. Also, an employee can rely upon verbal promises an employer makes, such reliance if reasonable can the consideration needed to make an enforceable contract.