Did You Just Create a Contract?

You tell a contractor you want him to repair a problem. Before leaving your house, the contractor says he will “look into it” and “get back to you.” Have you just made an oral contract for the repair? The answer to this question is no, according to Hodson v. Daron Cavaness Builder, Inc., 2017-1235 (La. App. 1 Cir. 2/27/18), a recent First Circuit Decision.

In Louisiana, an oral contract for over $500 must be proved by at least one witness and other corroborating circumstances. See La. C.C. art. 1846. The person trying to enforce the oral contract may serve as her own witness to meet this standard, but evidence of the corroborating circumstances must come from some other source. In Hodson, the plaintiff observed cracks in her floor and called a contractor to examine the problem. The plaintiff made it clear she wanted the contractor to repair the floor. While the contractor denied promising to fix the floor, he admitted that he promised to “look into it and get back with her in a week or two.” Despite his promise, he never called the homeowner back.

The plaintiff filed suit and claimed she was entitled to recover damages for the cost of repairing her floor. The Trial Court found the contractor’s admissions to be enough “corroborating evidence” to establish an oral contract for the repair. However, the First Circuit found the parties did not make an oral contract to repair the floor. Instead, the contractor only agreed to “look into it.” According to the Hodson Court, a “broken promise to look into a situation does not equate to an oral agreement to repair.”

The Hodson decision shows that while Louisiana law allows parties to create oral contracts, it can be difficult to prove that a contract was actually formed or to define the details of the agreement. If you put the agreement in writing, you won’t be left wondering whether you just created a contract.

 

Reynolds LeBlanc is a partner at Keogh Cox. His practice areas include commercial litigation, personal injury claims, appeals, and other matters. Reynolds is a former teacher, who in his free time plays music and perpetually talks himself into training for his next marathon.