When Verbal Agreements Go Wrong: The Statute of Frauds Explained

Verbal agreements are often made with the best of intentions—a promise to sell property, perform a service, or repay a loan. However, when one party fails to uphold their end of the deal, enforcing an oral contract in court can be far more complex than most people realize. Under Washington law, certain agreements must be in writing to be legally binding. This requirement, known as the Statute of Frauds, is codified in RCW 19.36 and serves as a safeguard against fraudulent claims and misunderstandings.

The Purpose Behind the Statute of Frauds

The Statute of Frauds exists to promote clarity and prevent disputes over alleged oral promises. Without a written record, courts are left to rely on conflicting testimony and recollection, which can lead to unjust outcomes. A written contract provides certainty by identifying the parties, the subject matter, and the key terms of the agreement, leaving little room for ambiguity.

Contracts That Must Be in Writing

Under RCW 19.36.010, Washington law identifies several categories of contracts that require written documentation and the signature of the party to be charged. These include:

  • Agreements for the sale or transfer of real property or any interest in land;
  • Contracts that cannot be performed within one year from the date of agreement;
  • Promises to pay another person’s debt (surety or guaranty agreements);
  • Agreements made upon consideration of marriage, such as prenuptial arrangements; and
  • Contracts for the sale of goods exceeding $500, governed by the Uniform Commercial Code (RCW 62A.2-201).

If an agreement falls within one of these categories and lacks a signed written record, it will generally be unenforceable in court.

Recognized Exceptions

Despite its strict language, the Statute of Frauds is not absolute. Washington courts have carved out equitable exceptions where fairness demands enforcement. The doctrine of part performance allows a court to uphold an oral contract when one party’s action, such as taking possession of land, making improvements, or paying substantial sums, clearly demonstrate reliance on the agreement. Another key principle, promissory estoppel, may apply when one party reasonably relies on another’s promise to their detriment, and injustice can only be avoided by enforcing that promise. These doctrines, however, are narrowly construed and depend on compelling evidence of reliance and fairness.

The Importance of Written Agreements

Even when an exception might exist, relying on verbal agreements is inherently risky. Over time, memories fade, interpretations differ, and critical details may be forgotten. A properly drafted written contract not only satisfies the legal requirements of RCW 19.36 but also minimizes the likelihood of litigation by clearly outlining each party’s rights and obligations. Written documentation can be the difference between swift enforcement and costly, uncertain dispute resolution.

Navigating contract disputes involving verbal promises requires a nuanced understanding of Washington’s statutory and equitable rules. At the Law Office of Erin Bradley McAleer, our attorneys assist clients in drafting, reviewing, and enforcing contracts that meet the standards of Washington law. Whether you’re involved in a real estate transaction, business arrangement, or service agreement, we work to ensure your interests are protected and your agreements are legally sound.

If you’re facing a disagreement over a verbal agreement or need guidance on how to safeguard your transactions, contact our Vancouver office today for a consultation.