oral understandings
Definition
Oral understandings are agreements or promises that two parties make by speaking to each other rather than writing anything down. Courts generally treat these spoken deals as legally binding, but proving what was actually said or agreed upon becomes extremely difficult when there is no written record.
Example
If you verbally agree with a supplier that they will deliver 500 units every month at a set price, that spoken promise could count as an oral understanding, but if they later deny saying it, you have very little to stand on.
Watch Out
Many contracts include a clause stating that the written agreement overrides all prior oral understandings, which means any promises made during negotiations that did not make it into the final document are essentially worthless.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.