Mythbuster – Verbal Contracts are NOT Valid Contracts

Lewis Hall

Lewis Hall


07 Nov 2018


This is a fairly common myth, but an important one. Why? Because a verbal employment contract or one that is only ‘implied’ can still be legally binding, meaning you could make a job offer without realising it.

If you make any form of promise relating to the individual’s employment, this refers to an ‘implied’ contract. If you discuss contract details with the individual, such as job duties, work hours, or pay & benefits, then this constitutes an explicit verbal employment contract.

A binding agreement can be formed on the basis of verbal statements or via information from an employee handbook or company policy. This is because a large portion of the details in the employee handbook will be similar to those found in a written employee contract.

How do I avoid making an implied contract?

Avoid making specific promises during the interview stage, or in the job offer letter should you choose to hire the individual. Such promises can include things like:

“We’ll never fire you”

“You’re guaranteed to have a job here for the next 5 years”

But they can also be more subtle, for example:

“Your pay & benefit package will be…”

“When your probationary period finishes…”

These may not seem like promises, but they imply that the individual is going to be employed in the future, and therefore can count as an implied contract.

If you wish to make an offer of employment, but don’t want to guarantee any terms before a written contract is drafted, avoid including promises/terms within the offer letter. It is also helpful to clearly inform the employee of the fact that the relationship between the employer and employee is at-will, meaning the relationship can be ended by either party at any time.

Implied vs Written

The danger of a verbal contract lies in the fact it is very difficult to enforce if things go pear-shaped. Just because an employee doesn’t have a written contract, doesn’t mean they have no terms or rights. You can verbally communicate what parts of the employee contract are legally binding, but they are more difficult to prove than a written contract.

If no terms are set out, either verbally or in writing, employees can expect implied terms, these include:

  • A safe and secure working environment
  • The right to a minimum of 5.6 week’s paid holiday
  • Recurring/standard company benefits (such as an end-of-quarter bonus)

A written agreement can clearly set out what the employee can expect under your employment so there is no grey area. As a matter of security it is advisable to have a written contract, they provide evidence for both parties and can be used as a reference should a dispute arise. A written contract means you can outline your expectations of the employee.

Expert Support

For assistance drafting an employment contract or any other HR/Employment law issue, speak to a employment law expert at Croner on 0808 145 3380

About the Author

Lewis Hall

Lewis Hall is Croner's Marketing Executive, responsible for producing, sourcing, and organising content across the website. He has a background of working in the legal marketing industry and is also responsible for Croner's social media channels, so keep your eyes peeled for fresh content!


Lewis Hall

Free to Download Employer Resources

  • Exit Interview Questionnaire


    Exit Interview Questionnaire

    Read more
  • Five HR Workouts


    Five HR Workouts

    Read more
  • Grievance Policy Guide & Template


    Grievance Policy Guide & Template

    Read more
  • BLOG

    [Infographic] Staff Absence Trends Tr...

    BrightHR has dug out the data, pulled the reports, and crunched the numbers with...

    Read more
  • BLOG

    Case Law Update: When is an Impairmen...

    The Employment Appeal Tribunal (EAT) has ruled that, when bringing a claim of di...

    Read more
  • BLOG

    Case Law Update: Company Losses & Rea...

    The Employment Appeal Tribunal (EAT) has found that permitting an employee to wo...

    Read more
  • Print Inc.


    Print Inc.

    Print Inc. are an embroidery and print company based in Carmarthenshire, South W...

    Read more
  • Scotgold Resources


    Scotgold Resources

    A lot of organisations believe they’re sitting on a gold mine. Scotgold resource

    Read more
  • Wacoal



    “Overall, we’re very happy with the service Croner provides and we’d recommend i

    Read more

Do you have any questions?

Get a free callback from one of our regional experts today