By Bruce Jervis
Any agreement worth making is worth putting in writing. This is particularly true of a construction contract, with its intricate web of risks, rights and responsibilities. Yet sometimes oral, unwritten agreements evolve. The question becomes – are unwritten agreements enforceable?
The simple answer is yes, if supported by sufficient evidence of reciprocal consideration and a “meeting of the minds.” Partial performance by both parties is persuasive evidence. The more difficult question becomes – how complete must the terms of the agreement be in order for there to be a meeting of the minds?
A Utah court recently addressed this question. The conclusion was that the absence of a defined scope of work and the absence of a total or maximum price did not render an oral cost-plus construction contract unenforceable. The million-dollar contract was enforced against the project owner.
Obviously, it is never advisable to work under an oral agreement. It is inexplicable that two parties did so in a situation involving a million dollars’ worth of construction services. However, sometimes large things evolve slowly from small beginnings and the informality of the relationship remains in place. Have you seen situations in which substantial construction work was performed under oral agreements? Your comments are welcomed.
