“Oral Contracts: Are Handshake Deals Still Enforceable?” by Richard T. Ashe

As the saying goes, “a handshake just doesn’t mean what it used to.” This common phrase has some truth to it, to be sure, but it does not accurately reflect Missouri law when it comes to the enforceability of an oral contract.
Yes, there are circumstances where a Missouri court would not enforce an oral agreement. For example, if the oral agreement concerns the sale of real property, a court would not enforce the agreement unless there was some writing evidencing the terms of the agreement.
But generally speaking, an oral contract is just as enforceable as a written contract. This is especially true when the person seeking to enforce the oral agreement has provided goods or services to another who claims they do not owe anything for the goods or services. Missouri courts will not allow a person to accept the benefit of someone else’s goods or services without payment.
This remains true even if the parties never actually agreed on a price to be paid for the goods or services.
Under such circumstances, the parties may not have even technically entered into a contract because a key term of the contract—the price—was not agreed to. Nevertheless, Missouri courts will force the person who accepted the goods or services to pay for the “reasonable value” of the goods or services.
A great example of this can be found in a case handled by our firm a few years ago, known as Cotner Productions, Inc. v. Snadon (“Cotner”). In Cotner, our clients introduced the defendants to a well known Las Vegas performer for the purpose of allowing the defendants to pitch the idea of opening a theater in Branson where the performer would be the headlining act. Neither the plaintiffs nor the defendants prepared or signed a written contract. Further, the parties never agreed on a specific price to be paid by the defendants for the introduction. The parties only discussed the idea that the plaintiffs would be paid a percentage of the value obtained by the defendants if they were successful in recruiting the performer for a show in Branson.
On this limited evidence, the trial court entered a judgment in favor of our client for more than $300,000, an amount that was later upheld by the Missouri Court of Appeals.
The court’s reasoning was simple: the defendants accepted the benefit of plaintiffs work in arranging the meeting between the performer and the defendants; and the value of this work could be quantified based on the testimony of an expert with knowledge of the industry. The fact that the parties had no written agreement had no affect on the outcome of the case.
So the next time you find yourself on the short end of a handshake deal, do not assume that you cannot get your day in court. An oral contract is, for the most part, just as enforceable as a written contract under Missouri law.