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Verbal Contract / Agreement Law BC | What You Need to Know

Richard B. Johnson

Co-Founder + Partner
November 23, 2023

Ever wonder if a verbal contract in BC actually holds up? Is there such a thing as a breach of verbal contract? It could be unsettling performing a job or task without a written contract but there is some good news. In British Columbia and across Canada, the law looks out for workers and freelancers, protecting your employment rights even when there’s little to no paper trail.

That said, there are a few ifs and buts to keep in mind. Today, we’ll answer the most burning questions regarding verbal contracts and agreements in BC:

Are handshake agreements common in British Columbia, and are there industries or scenarios where they’re more prevalent?

Handshake agreements, while they’ve become far less common than say 30 years ago, haven’t completely vanished from the professional landscape in British Columbia. There’s still a good chunk of employees who’ll clock in and out without the safeguard of a written contract. 

But let’s be clear, that doesn’t leave them entirely in professional limbo. In fact, having no written contract could be beneficial for employees! They’re still under the wing of common law – that’s the set of rules birthed from court decisions over time. And in many cases, believe it or not, the common law tends to be quite employee-friendly on some fronts.

How legally binding is a verbal agreement?

Just because a contract starts with a chat over coffee rather than a pen scratching on paper doesn’t make it any less real. A verbal agreement is like a pinky promise – it’s absolutely binding. The tricky part, though? It’s all about proof. If you need to show what was agreed upon and the parties don’t agree, it can get messy without solid evidence.

Can you prove a verbal agreement in court?

If you’re a contractor or freelancer, you know the risks of operating in good faith without a written contract. So, if you go to court over an unpaid invoice, it will be tough to gather sufficient evidence, though not impossible. In this case, you’ll need oral evidence in the form of individual testimony. If there were several people involved in cultivating an arrangement, their word becomes crucial. Your best bet is to consult with employment law professionals. They will know the strength of your case and determine the evidence needed to succeed before you incur additional court costs. 

Breach of Verbal Contract – Can employers change their mind after a verbal agreement?

If you’ve ever been promised something in a job offer and then had the rug pulled out from under you, you know how rough that can be. It’s not just a disappointment; it’s a breach of trust…and potentially a breach of contract! The same goes for employers – if they make a verbal offer, it’s as good as a handshake and a written agreement. Again, the difficulty could be in proving the terms.

Is a text message legally binding in Canada?

Believe it or not, that “Ok, you got the job! See you Monday!” text is more than just a digital high-five. It’s the new-age handshake – quick, convenient, and yes, legally binding. It’s like jotting down a promise on a napkin; unconventional but it still holds water. A text message can also be used as evidence in the future if a working relationship turns sour.

Are emails legally binding in Canada?

Email is the ultimate paper trail of the digital age. Many court corporate legal disputes hang on the very words written in emails. And yes, emails are legally binding when it comes to employment law in BC. They stand as tangible proof within British Columbia’s employment law, dispelling much of the debate about what was said by providing clear, trackable evidence of communication.

Is a handshake agreement legally binding?

You bet it is. A handshake can seal a deal but here’s the catch – it’s all about proving it later on if things go south. While binding, proving a handshake employment agreement will be very difficult in a court of law. 

Are there any specific clauses or terms that British Columbia employment law mandates in an employment contract?

Although you can start employment based on a verbal or handshake agreement, you’ll need to iron out the details in writing. The BC Employment Standards Act sets out minimum requirements for many employment agreements. The Act serves to protect you, the employee. Additional terms may include wage deductions, termination rights, overtime, vacation pay and time off, and more.

How do verbal agreements relate to BC’s Employment Standards Act?

The Act sets out the baseline—the essential minimums that employees are entitled to receive. However, without the clarity of a written contract, these minimums are just the starting line. For an employee, this could mean there’s room to argue for more than what’s spelled out in the Act based on what was agreed upon verbally.

What steps should a contractor take if they haven’t been paid despite a verbal agreement?

First thing you’ll want to do is get advice from an expert and draft a demand for payment. Set out the terms and make attempts to negotiate. If the informal route doesn’t lead to a resolution, legal action through small claims court or a similar avenue may be the next course to chart. 

While verbal agreements can be enforceable, the lack of written terms often means that you’ll need to present compelling evidence that the agreement existed and the terms it entailed, making the process somewhat more challenging than if a written contract were in place.

Luxuries you Might Not Get With Verbal Agreements

NDA’s/Confidentiality Clauses (for Employers)

Employees are not the only party at risk when it comes to a verbal contract in BC. Without written employment contracts, sensitive company information might be at risk. A verbal contract may offer a sense of freedom with no obligations attached for either party. But it’s always best to have it in writing if you want to keep company secrets in house. 

Payment for Expenses

Ensuring reimbursement for business expenses through a verbal contract in BC is a shaky proposition. Without the clarity and commitment of a written agreement, employees might find themselves left with out-of-pocket costs, with little recourse for recovery.

Payment Terms

It’s tough to enforce payment of a contractor invoice when there’s no written agreement that includes payment terms. A written agreement solidifies expectations and terms, preventing the goalposts from moving when it’s time for payment. Without the details down on paper, you might just end up spinning your wheels waiting for that payment.

Intellectual Property Protection

So, you’ve invented the next big thing in tech, or you’ve streamlined a process at work that’s saving hours of labor. The adrenaline rush of creating something new is unbeatable, but without a written agreement, figuring out who owns that new invention can be a challenge. This is the part of an employment contract that you want clearly defined.