Introduction to this document

No contract

Chances are that at some time, another business will contact you claiming that you’ve entered into a verbal contract which you know nothing about! Our letter is designed to help you respond to such an allegation with the aim of putting this matter to bed.

Verbal contracts

Yes, they do exist and are perfectly legal except for one or two exceptions, e.g. buying and selling land, consumer credit agreements.


Because verbal contracts are legal, make sure that you’re not caught out, by say, having a hasty telephone conversation where you quickly agree to something just to get shot of the caller. If this happens, provided the basics for a contract to be formed are present, e.g. offer, acceptance, payment and an intention to enter into the deal, then you’re bound by the agreement.


Don’t think that just because it’s a distance contract, e.g. it’s made by phone, e-mail, fax etc., there’s automatically a cooling off period and you can therefore change your mind and back out. This right to change your mind only applies to consumer contracts, not those entered into on a business to business basis.

If, after checking your records and speaking to your employees, you’re satisfied that no verbal deal has been made, it’s time to go on the offensive. Use our letter to do precisely that. Write and challenge the evidence and request full details. It’s perfectly acceptable to threaten the other side regarding costs unless they can produce some evidence to substantiate their demand. These days, you’re not supposed to bring a claim unless it’s the last resort. If this rule is ignored, then usually, an order for costs can be made on the basis that the other party’s conduct is unreasonable. Therefore, it makes sense to put the other side on the spot right from the outset in order to ascertain whether or not it’s a try on.