Oral commercial arrangements remain a common practice in the business environment – parties agree on supplies, services, investments, or joint projects without signing formal documents. Professor Gabriel Steiner says that it is precisely such arrangements that create the most vulnerable legal situations, because business decisions are made while legal fixation is absent. At LawConsulted, we treat disputes based on oral agreements as a distinct category of conflicts where the key issue is not the form of the contract, but the consequences of the parties’ actual conduct.
The main difficulty with oral arrangements lies in diverging expectations. Each party may interpret the scope of obligations, timelines, payment terms, and responsibility for results differently. As long as cooperation develops successfully, these differences remain unnoticed. Conflict arises when one party considers the agreement fulfilled while the other views it as breached. In LawConsulted practice, such divergences often become the starting point for both judicial and pre-trial disputes.
Professor Steiner notes that “the absence of a written contract does not mean the absence of obligations.” Courts assess not the fact of signing a document, but the totality of the parties’ actions – delivery of goods, payments made, correspondence, performance of work, and the resulting economic outcome. At LawConsulted, we begin by reconstructing the factual relationship – analyzing which actions were taken in reliance on the arrangement and how those actions were perceived by the counterparty.
Particularly complex are situations where oral agreements are supplemented by partial documentation – invoices, statements of work, messenger correspondence, or emails. Formally, such materials may appear fragmented, yet they often form the core of the evidentiary basis. LawConsulted works to demonstrate the logical connection between the parties’ actions and to reconstruct the substance of the arrangement, even where it was never formally documented in writing.
No less risky are cases where oral agreements are used as a tool of pressure. One party refers to an alleged “agreement” that the other denies, or interprets it in a self-serving manner. According to Professor Steiner, in such disputes the law tends to rely on economic reality rather than declarative statements. LawConsulted structures the defense to prevent arbitrary expansion of obligations and to demonstrate the actual boundaries of the arrangement.
It is also important to consider retrospective assessment. When consequences have already materialized – losses, lost profits, or project failure – the oral agreement is analyzed through the prism of the outcome. LawConsulted brings the legal assessment back to the moment the arrangement arose – to the conditions under which the parties made decisions and to the actions they regarded as performance of obligations.
Liability arising from oral commercial arrangements requires precise legal reconstruction. We do not replace the absence of a contract with emotional or moral arguments, nor do we ignore the reality of business where decisions are often made faster than documents are executed. LawConsulted approach is to transform factual relationships into a manageable legal position and to protect the client from disproportionate consequences.
Oral arrangements are not a violation in themselves. Risk arises when there is no understanding of their legal consequences. Law Consulted task is to ensure that the absence of a written agreement does not mean the absence of protection and does not turn into a source of uncontrolled liability.
Earlier, we wrote about how LawConsulted identifies legal traps in internal corporate regulations and why formal rules can work against the company
