- Verbal agreements are typically enforceable in Florida
- There are a few exceptions, but construction contracts are usually not included
- Therefore, verbal construction contracts are usually enforced by Florida courts
Written Contracts are Typically Not Required
In Florida, construction contracts require three key elements: an offer, acceptance, and consideration (an exchange of something of value). Noticeably, a written contract and signatures are not elements on this list.
Some contracts in Florida must be in writing to be enforceable. For example, contracts for the sale of real estate must be in writing. Likewise, under Section 672.201 of Florida’s Uniform Commercial Code (“UCC”), sales of “goods” for a price of $500 or more usually must be evidenced by some form of writing. While there are some outliers, construction contracts usually do not fit within either of these categories. This is because construction contracts typically do not involve the sale of real property and are primarily service-based contracts.
Here are few examples of when construction contracts might need to be in writing:
- The contract involves the construction and sale of real property, such as new home;
- The contract involves solely the supply of materials, such as windows that will be installed by a different contractor;
- The contract involves the sale and installation of materials, but the materials are more important than the services provided.
Keep in mind, these are exceptions. Most construction contracts do not fit in these categories because Florida courts view contractors as service providers, not merchants.
Proving a Verbal Agreement May Still be Difficult
Although generally enforceable, verbal construction contracts may be difficult to prove. To resolve these disputes, Florida courts may review other documents, listen to the parties’ testimony, and attempt to reconcile any conflicting information.
Evidence such as performance under the terms, documented payments, witnesses, or subsequent written communications can help substantiate the agreement’s existence. However, conflicting information, especially regarding essential terms of the contract, may make it difficult to obtain a ruling in the contractor’s favor.
Parties who are considering filing a lawsuit to enforce a verbal construction agreement should carefully evaluate all factors and available evidence to determine their strengths and weaknesses. One significant roadblock to enforcing a verbal contract may be the existence of a written contract with contradictory terms. Consider the following scenario:
- Owner and contractor enter a written contract for a installation of a new roof
- The contract states that any changes to the work need to be approved in writing
- Owner and contractor subsequently verbally agree to expand the scope of work
- Owner refuses to pay for the additional work and violates the verbal agreement
In this scenario, the verbal change order may be unenforceable because the written contract required all changes to be approved in writing. This is a common pitfall for Florida subcontractors.
Best Practices for Contractors
Although verbal construction contracts are typically enforceable, contractors should be wary of entering verbal agreements. Contractors should avoid working, or extending credit, based upon “handshake deals”. These agreements are typically more difficult to prove, and in worst case scenarios, may be unenforceable.
Contractors who are considering accepting a verbal change to an existing contract should demand that the change order be approved in writing. This writing could be as simple as text message or email, although more formal agreements are typically better. Contractors should also review the terms of the written contract to determine if any other procedures are required for the change.
Finally, contractors who are faced with a non-payment situation based on verbal agreement should carefully evaluate their options. When there are conflicting statements or evidence, it may be advantageous to negotiate or make concessions before launching into a conflict or lawsuit. However, if negotiations are not promising, a lawsuit may be required to recover payment.
DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
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