Since then, a Delaware decision has highlighted the circumstances in which courts will enforce oral agreements and suggests that the old proverb „an oral contract is not worth the paper on which it is written“ no longer applies. In order to guarantee the existence of the contract before the courts, there can be no valid defense against performance. An example would be a party sued by a minor. Nor can the contract be enforced if a party claims that the contract is fraudulent or due to coercion. For example, employers, workers and independent contractors may find it invaluable to document the terms of their agreements in an employment contract or service agreement. While an oral agreement can be legally enforceable, it can be difficult to prove it in court. All states have passed laws known as the Fraud Act. These laws require that anyone involved in certain types of transactions have a written agreement or contract. For example, any real estate or land sale or transaction must be accompanied by a written contract, document or similar documentation.

If you do not use a written contract for a transaction covered by fraud law, one or both parties may cancel the contract. This does not necessarily mean the automatic cancellation of the oral contract; it simply means that at least one party may render it unenforceable or invalid. Many oral contracts are legally binding, but the possibility of a party not respecting its commitment still exists; This is the reason why people often prefer to get their agreements in writing.