Is an oral contract legally valid?

Question

José Manuel Alburquerque · Accepted Answer

Yes. A contract made orally is as binding as a written one, because as a general rule the law does not require any particular form for a contract to be valid. Only a few contracts need a specific form in order to exist, such as the gift of a property or a mortgage, which require a public deed. For the rest, even if the law says they must be in writing or in a deed, either party can require the other to put the contract into that form. The problem with an oral contract is not its validity but proving afterwards what was agreed. Why it is valid In Catalonia, as in most of the rest of Spain, this is governed by the Spanish Civil Code (“Código civil”), because the “Código Civil de Cataluña”, the Catalan Civil Code, has no general rules on the form of contracts. The contract of sale, which the Catalan code does regulate, does not require any particular form to be valid either. An oral contract is concluded when the parties reach agreement. From then on it binds them to what was agreed and also to whatever good faith, custom and the law require, even if this was not expressly stated. The law says that some contracts must be recorded in a public deed, such as those transferring a property, or at least in writing. That does not make them invalid if they were made orally or in a private document. What it does is allow each party to compel the other to put the contract into that form, for example by signing the deed before a notary. That is why a sale in a private document is valid. A written contract can also be changed orally, unless the contract itself requires changes to be made in writing, although the change is then just as difficult to prove. Contracts that are not valid if made orally Some contracts and acts are only valid if they are made in the form required by law. They include, among others, the following: The gift of a property, which in Catalonia is only valid if it is made and accepted by public deed. A gift of money or other movable property must be made in writing, unless the thing is handed over at the same time. A mortgage, which is created by public deed and must be entered in the “Registro de la Propiedad”, the Land Registry. Marriage contracts (“capitulaciones matrimoniales”), which are the spouses' agreements on the property regime of their marriage and are executed by public deed. In Catalonia, the succession agreement, which is an agreement on a person's estate made during their lifetime, also by public deed. A lasting power of attorney (“poder preventivo”), which is granted by public deed to someone you trust so that they can act for you if you need it in the future. Why it is advisable to put it in writing If a disagreement arises, whoever claims something on the basis of what was agreed orally has to prove it. Any means will do, such as messages, bank transfers or witnesses, but it is harder than with a signed document. A written document also makes clear the things that are not usually discussed, such as what happens if one of the parties fails to comply. A tenancy of a home, of commercial premises or of a parking space is also valid if agreed orally, although tenancies have their own rules.