How Can I Make Verbal Promises Legally Binding? (2025 Updated)

Contents

A verbal promise can be made legally binding if it satisfies all of the essential elements of a contract, even in our current 2025 legal landscape.

For an agreement to qualify as a valid contract, whether verbal or written, both parties should exhibit the following elements:

Offer and acceptance
Agreed terms
Intention to be legally bound
Consideration
Free consent
Legal capacity

Let’s break down what this means in today’s business environment!

Offer And Acceptance

Let’s look at a casual conversation between two friends:

Groom: “Would you play the guitar at my wedding for one hour? I’ll pay you $100.”

Musician: “Sure.”

Here, the offer is a specific payment ($100) for a service (playing guitar), and the acceptance is the musician agreeing to perform the service. Recognising a clear offer and acceptance is fundamental. For further insight into these basic principles, see our detailed guide on What is a Contract?.

Agreed Terms

The musician and the groom work out finer details – they agree that the musician will bring his PA system and all necessary equipment, and the groom promises not to be more than 20 minutes late. They also agree that payment will be made by bank transfer the day before the wedding, and that free parking will be provided for the musician. Additionally, the musician agrees to perform a specific playlist chosen by the groom. If the musician opts for a written service agreement, these terms would be documented in far greater detail.

These agreed terms between both parties help complete the contract and reinforce its legal binding nature.

Intention To Be Legally Bound

Simply put, both parties must intend to stand by the promise they made. For instance, a verbal promise such as “I will let you choose my first born’s name if you give me that chocolate cake” is unlikely to be legally binding, as it appears driven more by whim than by a genuine intent.

In our 2025 legal environment, if the guitarist expects to be bound to perform at the wedding for the agreed payment, and the groom anticipates compensating for that service, their mutual intention underpins the contract’s enforceability. For a deeper dive into what solidifies a contract’s binding nature, check out our discussion on What Makes a Contract Legally Binding?.

Consideration

This element is crucial – both parties must receive something of value from the agreement. In 2025, whether that value is in the form of money, services, or goods, the principle remains the same.

In our example, the musician provides his performance in exchange for payment, meaning that each party is reciprocally offering meaningful consideration.

Free Consent

For any contract to be legally binding, the consent of both parties must be given voluntarily – free from duress, coercion, or undue influence.

Let’s quickly go over what these terms mean:

Duress – where one party forces the other to enter into an agreement against their will, resulting in the contract being rescinded.
Coercion – similar to duress, but involving threats or actual violence to compel someone to contract.
Undue influence – where a party abuses their power over another, often due to a special relationship, thereby unfairly influencing the decision to contract.

Generally speaking, if a contract was formed under these unsound circumstances, it may be deemed unenforceable. However, courts in 2025 continue to assess each case based on its unique circumstances, so it isn’t always a straightforward dismissal.

Legal Capacity

Legal capacity refers to a party’s ability to enter into a contract. Various factors can affect this capacity, so let’s explore them:

Mental Impairment

If someone is unable to fully understand the nature of an agreement due to a mental impairment, that contract may not be valid. Moreover, if the other party knew or should have known about the impairment and exploited it, the agreement’s enforceability can be questioned.

Young People

The Age of Majority Act 1977 (Vic) defines a young person as anyone under the age of 18. Generally, contracts for ‘necessaries’ such as food and clothing are enforceable, whereas agreements for non-essential items or repayment of money may not be binding for young people.

This leniency helps protect younger individuals from unfair financial obligations, a safeguard that remains important in 2025.

Bankrupts

Individuals declared bankrupt still retain legal capacity, though there are specific limitations outlined in the Bankruptcy Act 1966 (Cth). Such individuals may be required to disclose their bankruptcy status before entering into new contracts.

Corporation

A corporation is considered a separate legal entity and, as such, can enter into contracts similarly to an individual. However, these agreements generally require proper authorisation through corporate resolutions. For small business owners, determining the appropriate business structure is crucial – our guide on Sole Trader vs Company offers valuable insights into these matters.

Modern Considerations

In today’s digital age of 2025, while many agreements are still made verbally, it’s always prudent to follow up with a written confirmation. This practice not only reinforces both parties’ commitment but also provides reliable evidence should any disputes arise later. For guidance on documenting your agreements effectively, explore our Contract Review service.

The Takeaway

When conversing with others, promises made in exchange for goods or services may satisfy the basic elements of a contract. However, determining the precise moment these promises become legally binding can be complex.

If you’re ever in doubt about the enforceability of a verbal agreement, or if your arrangement involves significant obligations, it’s wise to seek legal advice. At Sprintlaw, we’re here to help clarify contract terms and ensure your rights are protected in 2025 and beyond. Our comprehensive guides and services, including resources like Contract Review, are designed to support you every step of the way.

It can be a tricky area to navigate, so it’s always a good idea to ask for some legal help. You can reach out to team@sprintlaw.com.au or call us on 1800 730 617 for a free, no-obligation chat.

Justine Wu

Justine is a legal consultant at Sprintlaw. She has experience in civil law and human rights law with a double degree in law and media production. Justine has an interest in intellectual property and employment law.

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