In Turner Broadcasting v. McDavid, David McDavid negotiated with Turner to acquire the Atlanta Hawks and other assets. After months of negotiations and numerous detailed term sheets exchanged between their lawyers, Turner`s chairman, McDavid, announced on a conference call that „we have an agreement.” A few days later, when the terms of the McDavid deal were recorded in formal legal documents, Turner struck a deal to sell the same assets to Atlanta Spirit, LLC. For the above reasons, the Court of Justice found, for an error, that the agreement is an amendment that must be made in writing to be applied. It therefore remains a key factual question whether the parties have entered into an oral withdrawal agreement from the transaction. To be legally enforceable, all contracts must meet certain requirements. First, and most importantly, there must be mutual consent or agreement between the parties. This is sometimes called the „meeting of heads”. Secondly, the agreement must cover all the essential or important concepts that should be clearly defined and clear.
Examples of essential concepts are item descriptions, price, timing and terms of payment, etc. Third, there must be appropriate consideration or value to support the obligations of the parties to the contract. Fourth, the subject-matter of the contract must not be contrary to public policy. For example, a gambling contract would not be applicable in a state where gambling is illegal. Finally, the parties must be competent (with a sound mind) and be able to enter into contracts (usually 18 years or more). Just watch an episode of People`s Court or Judge Judy, and you`ll see that you can file a complaint for an oral agreement. But you have to prove your case, which can be difficult. If someone has broken their oral agreement with you and you want your money back, apply for legal aid that you can trust. Just like the aunt in our imaginary scenario, you`re probably better off documenting an agreement in writing. Something as simple as a promission note, which details the nephew`s promise to repay his aunt, could have prevented any dispute over his agreement. Finally, it is less complicated to ask for a written credit agreement from family members than to bring them to justice.