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CMA Foundation · Fundamentals of Business Laws and Business Communication · Legal Aspects of Business Communication

Ravi telephones a supplier and orally agrees a purchase, and later the supplier denies it. Ravi sends no written confirmation. Which statement is most accurate?

The agreement may be valid, but it is hard to prove. Indian contract law generally does not demand writing for ordinary contracts, so oral agreements can bind. However, without written confirmation Ravi lacks evidence if the supplier denies it, which is why documenting oral dealings in writing is advisable.

  1. AAn oral agreement is always void in Indian law
  2. BThe agreement may be valid but is hard to prove, so written confirmation would have reduced the riskCorrect
  3. COnly written communication has any legal value
  4. DThe supplier is bound only if a witness was on the call

Explanation

Contract law generally does not require writing for ordinary contracts, so oral agreements can be valid. The difficulty lies in proof, which is why written confirmation is good practice. Saying oral agreements are always void is incorrect.

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