Verbally or in Writing?

A contract is concluded when the contracting parties agree on its essentials, i.e. when there are two identical manifestations of will and intent to enter into a contract. Contracts are not usually bound by any specific form (unless a written or other form is required by law for a particular type of contract, e.g. a licensing agreement granting an exclusive licence must be made in writing).

As is often the case in practice, a contract may be concluded verbally, for example by phone or handshake. No additional written confirmation is required for such contract to be effective. However, in case a dispute arises during the term of a verbally concluded contract (for example if deadlines are not met, payments are not received in time or not at all, or there are disagreements over the performance of the contract, etc.), it is very useful to have the contract in writing, because anyone who refers to a contractual obligation of the other party also has to be able to prove the existence of such obligation.


During a phone conversation with a customer, a sculptor agrees to create sculpture for the customer and sell it to him for EUR 1,000. After the sculptor creates and delivers the sculpture, the customer pays only a half of the agreed sum, claiming that the work has not met his expectations and has been delivered late. The sculptor faces a problem since he only has a verbal contract. Even though the contract between the sculptor and the customer is valid and effective and even though the customer (not the sculptor) would have to prove in a potential lawsuit that the work was not delivered in due and timely manner, the sculptor would have to prove the amount of the price agreed by phone (verbally), which would be difficult for him. For this reason, it is not advisable to enter into verbal contracts without witnesses. When a dispute arises, even a few basic points written down and confirmed by both parties are better than having no written contract at all; an e-mail is usually considered a written form.