What is defined as an oral agreement that may be enforceable if validly created?

A parol contract refers to an oral agreement that can be legally enforceable if it meets the necessary criteria for a valid contract. In legal terms, this type of agreement is grounded in the principles of contract law, which stipulates that a contract can be formed through mutual consent, consideration, and legal purpose, regardless of whether it is written or spoken.

In many jurisdictions, including Michigan, as long as the essential elements of a contract are present—such as offer, acceptance, consideration, and the intention to create legal relations—an oral agreement can be upheld in a court of law. This contrasts with written contracts, which provide a clear and tangible record of the terms agreed upon.

Understanding that a parol contract can be enforceable highlights the importance of recognizing oral agreements in legal contexts, especially since many people may mistakenly believe that only written contracts hold legal weight. This knowledge is crucial for those engaged in negotiations or business dealings where oral commitments are frequent.