Difficulty Of Verbal Contracts Highlighted By Controversy, Employment Expert Warns

By Rob Dixon

The ongoing debate and controversy surrounding Liverpool striker Luis Suarez’s future at the club has provided an important reminder to employers on a range of contract issues including verbal agreements, according to an employment law expert.

Football headlines in recent weeks have been dominated by reports on whether the Uruguay international will be moving from Anfield this summer, with Arsenal reportedly seeming to be a likely destination for the forward.

Despite Liverpool insisting the player is not for sale, Suarez himself has gone on to claim to national newspapers that the club promised last year he would be able to leave if they failed to qualify for the Champions League. This has since been denied by Liverpool manager Brendan Rodgers.

As the controversy surrounding the transfer saga continues, Glenn Hayes, a Partner who specialises in employment law at Irwin Mitchell, said the circumstances which have developed have raised some important issues for all kinds of employers to bear in mind.

He outlined: “While it is of course unwise to speculate on any particulars regarding the Suarez situation, it does raise many questions regarding verbal agreements and exactly what they mean in terms of employment law.

“In general, unless stated otherwise within a written agreement, a verbal contract between an employer and a member of staff is legally binding assuming there is an intention on the part of both parties for this to be the case.

“There can be a misconception on this point as there are certain agreements – such as for the sale of a property – which must be made in writing. However, in terms of employment, this is not the case and any such contract or agreement should therefore always be carefully considered.

“Understandably, the flipside to this is the fact that it is of course very difficult evidentially to rely on a verbal agreement when it comes to a dispute between employer and employee. That is why general guidance states that there should still be some form of written evidence regarding a verbal agreement, with both parties usually signing a document to evidence their agreement.

“Otherwise, as has been seen in the Suarez case, it can be tough to prove to exactly what each party has said and ultimately agreed to. Numerous cases have been seen in the past when all manner of misunderstandings have arisen over verbal agreements and the exact terms of such a contract. 

“Furthermore, where matters are ambiguous in a written document, oral evidence is often cited as to what the parties intentions were at the time with ambiguity usually construed against the person who drafted the contract itself. There is also the possibility, however, that such oral discussions can be expressly excluded by a written agreement by the inclusion of an “entire agreement” clause within the written document, thereby nullifying all previous discussions and promises unless included in the document itself.

“Because of this, it cannot be stressed enough that getting a comprehensive and clear agreement drafted with a specialist lawyer could spare all parties involved potentially time-consuming and costly legal battles, as well as the various stresses and emotional difficulties that such cases can often create.”

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