Every novice in law is taught Contracts Act from the very beginning and it is very clear that in the Contracts Act, in order for an agreement to be valid, there ought to be a valid contract and there ought to be the following :

  1. A proposal
  2. Acceptance of said proposal
  3. Lawful object (which is being dealt with)
  4. Consideration for the said proposal
  5. Both parties having the ability to contract

Agreements are of two varieties, oral and written.

Written Agreements are composition of text which is expressed in writing and it is on paper and it is explicit in nature. Written Agreements have a evidentiary value which is higher than that of oral agreements because in the event of a dispute, they can easily be referred to and enforced by the courts.

Oral agreements on the other hand, are words and gestures which convey a promise from one party to another and on the acceptance of such promise, it becomes a valid oral agreement. Oral agreements may be express or implied. The evidentiary value of these oral agreements is not much as it is second hand knowledge and courts cannot arrive at a conclusion without invoking bias against one party.

In India, both agreements, whether oral or written are valid and fall under the gambit of the Indian Contracts Act.

In 1991, Delhi High Court held that an oral agreement is valid and enforceable as a contract in the case of Nanak Builders and Investors Pvt. Ltd Vs. Vinod Kumar Alag AIR 1991 Delhi 315

The Supreme Court too upheld the validity of oral agreements in Alka Bose Vs Parmatma Devi & Ors. (Civil Appeal Nos. 6197 of 2000)

Although as per law, an oral agreement is valid, but their enforceability comes to question in the event of a dispute. Section 92 of Indian Evidence Act, specifically states that in the event of a dispute related to disposition of property, oral agreement evidence shall be entertained by the courts for the purpose of contradicting, adding, varying any term.

Thus, it is clear that although India recognizes the existence of oral agreements, their enforceability is lacking as per law. It is highly recommended that one should convert their agreements to composition of texts. Oral agreements are permissible but they are extremely tricky to prove in a court of law and becomes a he said-she said situation.