Legal Definitions - parol agreement

A parol agreement is an agreement made by spoken words, rather than being written down. It refers to an oral contract or understanding reached between parties.

A parol agreement refers to an agreement that is made verbally, or orally, rather than being put into writing. The term "parol" essentially means "spoken" or "oral." While many important agreements are formalized in written contracts, a parol agreement is one where the parties involved reach an understanding and commit to terms through spoken words.

Here are some examples to illustrate a parol agreement:

• Example 1: Casual Sale

  Imagine your neighbor, Maria, sees your old lawnmower and asks if you'd be willing to sell it. You verbally agree to sell it to her for $150, and she agrees to pick it up and pay you next Saturday. This is a parol agreement because all the essential terms of the sale (the item, the price, the parties, and the payment/delivery date) were discussed and agreed upon entirely through spoken communication, without any written document.

• Example 2: Service Arrangement

  A small business owner calls a local cleaning service and verbally agrees over the phone to have their office cleaned weekly for a set monthly fee. They discuss the scope of work, the schedule, and the price, and both parties confirm their understanding and acceptance. This constitutes a parol agreement because the service terms and conditions were established and accepted through a verbal exchange, not a signed contract.

• Example 3: Informal Business Understanding

  During a team meeting, a project manager verbally assigns a specific, urgent task to a team member, David, along with a deadline. David orally confirms that he understands the task and will complete it by the deadline. This is a parol agreement in a professional setting, where a commitment and understanding regarding a work assignment are reached through spoken words rather than a formal written directive or email confirmation.