Carroll County Times
Carroll County Times Opinion

Legal Matters: Verbal contracts can be valid, can turn into 'he said, she said'

The voice on the phone sounded upset.

The caller’s landlord was doing some renovations that required the caller to move out of her apartment. She reported he offered her a larger apartment at the same monthly rent she had been paying. She accepted. But after she agreed to move into the larger apartment, the landlord told her he was increasing her rent.


Can he do that?

If the landlord’s offer was a verbal one and there is no written record, tape or cell phone recording, the tenant has a potential enforcement problem. Recollections of the rent discussion may differ.


The landlord is likely to remember that he told the tenant she would have to pay more for the larger unit, while the tenant will remember agreeing to accept the larger unit at no additional charge.

A verbal agreement can be just as binding and enforceable as a written one, if it contains all the elements of a valid contract. A valid contract must have offer and acceptance, consideration (something each gives up), mutual assent and no valid defense to enforcement, such as one party lacking mental capacity.

In this case, there was an offer — I’ll rent you a larger apartment — and acceptance — I’ll move into it.

There was consideration — landlord receives less income for larger apartment, tenant has to leave her existing apartment.

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There was mutual assent to the initial arrangement.

There still may be a valid defense to enforcement, if one party fails to live up to the terms of the agreement.

If the dispute went to court, the tenant might argue that the landlord invalidated the contract by unilaterally changing the terms after she agreed to them. The landlord might argue that she has cost him money because he had to pay the contractors, but could not start the scheduled renovations while she remained in her original apartment. He may argue that he had advised the tenant she would have to pay more, and she agreed.

A judge is likely to look for elements of fraud that would render the agreement invalid.


Did the landlord misrepresent the offer, knowing that he intended to raise the rent after the tenant moved? Was the tenant trying to take advantage by getting a larger unit and then refusing to pay higher rent? Was the landlord using his more powerful position to enforce an unconscionable bargain — a higher rent the tenant could not afford to pay?

If there are no indications of fraud, the judge may be facing a “he said, she said,” case. These are difficult, because they may come down to assessments of the respective parties’ credibility.

To avoid a potential court case, the parties could have written the agreement as an addendum to their rental contract and signed it. Even if they failed to do so, they can try mediation, a “work it out” process which is likely to be less time-consuming and costly than a lawsuit.