Breach of an Oral Contract in California: Enforceability and the Two-Year Clock

Last updated: November 2026

An oral contract is enforceable in California unless a statute requires that kind of agreement to be in writing. (Civ. Code, § 1622.) The two practical differences from a written contract are proof and time. The party suing must establish the terms through testimony, conduct, and whatever records exist, and the lawsuit must be filed within two years of the breach rather than four. Kolmogorov Law, P.C. litigates oral contract disputes for businesses in Orange County, Los Angeles, and across California.

Call (909) 235-6116 or contact us online to discuss a handshake deal that has gone wrong.

An oral contract in California is a contract

Clients often open with an apology: "We never put it in writing." That is not fatal. The Civil Code says all contracts may be oral except those a statute specifically requires to be in writing. (Civ. Code, § 1622.) A contract is simply an agreement to do or not do a certain thing (Civ. Code, § 1549), and it needs the same four ingredients whether spoken or signed: capable parties, consent, a lawful object, and consideration. (Civ. Code, § 1550.)

A contract can even be formed without words, by conduct alone. (Civ. Code, § 1621.) Our page on implied contracts covers that situation.

The question is not whether an oral agreement counts. It is whether you can prove what it said, and whether you are still in time.

When an oral agreement is not enough

The statute of frauds lists the agreements that are invalid unless they, or some memorandum of them, are in writing and signed by the party to be charged. For business owners the important categories are these. An agreement that by its terms cannot be performed within a year. A promise to answer for another person's debt. A lease longer than one year, or a sale of real property. An agreement to pay a broker a real estate commission. A commitment by a lender to loan more than $100,000 for business purposes. (Civ. Code, § 1624, subd. (a)(1)-(4), (7).)

A contract for the sale of goods priced at $500 or more has its own writing requirement, with exceptions for specially manufactured goods, admissions in court, and goods that were paid for or accepted. (Com. Code, § 2201, subds. (1), (3).)

Each category has limits and exceptions, and I cover them on our page on the California statute of frauds. Two points matter here. First, the one-year rule reaches only contracts that by their terms cannot be completed within a year; a contract of indefinite duration that could be finished in a month is outside it. Second, a party who has fully performed its side of an oral agreement can usually enforce it despite the statute.

The two-year clock

An action on a contract not founded upon an instrument in writing must be filed within two years. (Code Civ. Proc., § 339, subd. 1.) A written contract gets four. (Code Civ. Proc., § 337, subd. (a).) The period generally runs from the breach, not from the date the agreement was made.

Two years passes quickly in a business relationship. The parties argue, exchange proposals, go quiet, and resume. By the time an owner decides to sue, the breach is often eighteen months old. Our page on the breach of contract statute of limitations explains the accrual rules and the few ways the period can be extended.

One wrinkle helps. Emails, text messages, and electronic signatures satisfy a law that requires a record or signature to be in writing. (Civ. Code, § 1633.7, subds. (c), (d).) If the deal was confirmed in an email chain that states the essential terms, the contract may be treated as written, with a four-year period. Whether a particular exchange qualifies depends on what it says and who sent it.

How these disputes arise

A consultant agrees over lunch to redesign a company's sales process for a monthly fee plus a bonus if revenue grows. The consultant delivers, revenue grows, and the owner pays the monthly fee but disputes the bonus. The fee payments prove a contract existed. The bonus term is the fight.

Two business owners agree by phone that one will supply product on net-sixty terms. Invoices go out, payments come in, and after a year the buyer stops paying and claims the terms were net-ninety and the last shipment was defective. The course of dealing, twelve months of it, proves most of the agreement. See our page on collecting unpaid invoices.

Proving the terms

In an oral contract case the evidence is everything that surrounded the words. I look for the conduct of both parties after the conversation: who shipped, who paid, who invoiced for what amount. Then the contemporaneous records: texts, emails, calendar entries, notes, bank records. Then the witnesses who were in the room or heard about the deal shortly afterward.

Course of performance carries unusual weight. If the buyer paid forty invoices at the stated price without complaint, a jury will not believe the price was never agreed. The plaintiff bears the burden on each element by a preponderance of the evidence (Evid. Code, §§ 115, 500), and that standard is met by the more convincing story, not by a signed page.

Where the writing never existed, the plaintiff's own credibility matters more than in any other kind of contract case. Our page on how to prove breach of contract covers the evidence in detail.

What we do, and where the cases are heard

We start by deciding whether the agreement is enforceable at all, then build the proof from conduct and records before memories fade. Where the two-year deadline is near, we file first and negotiate afterward.

Oral contract cases are heard in the Superior Court: the Central Justice Center in Santa Ana for Orange County, the Stanley Mosk Courthouse for Los Angeles. Cases between parties from different states may be in the Central District of California.

What to bring to the first meeting

Bring every text, email, and note that touches the agreement, your invoices and bank records, the names of anyone who witnessed the conversation, and the date of the last payment or performance by the other side. Write down the terms as you remember them before you talk to anyone else about the case.

Frequently asked questions

Is a verbal contract legally binding in California?

Yes. California law provides that all contracts may be oral unless a statute specifically requires a writing. (Civ. Code, § 1622.) The main exceptions are in the statute of frauds: contracts that cannot be performed within a year, real property sales and long leases, guarantees of another's debt, and sales of goods at $500 or more.

How long do I have to sue for breach of a verbal agreement in California?

Two years from the breach for a contract not founded on a written instrument. (Code Civ. Proc., § 339, subd. 1.) Written contracts have four years. If the agreement was confirmed in emails or texts that state its terms, the longer period may apply, but do not count on it without advice.

How do you prove a verbal contract?

Through the conduct of the parties, contemporaneous records, and witnesses. Payments, deliveries, invoices, texts, and emails that reflect the terms are the most persuasive evidence. The burden is a preponderance of the evidence, which means the more believable account wins. Consistency between your story and the paper trail is what persuades a judge or jury.

What if the other side denies the agreement existed?

That is the usual defense. The response is evidence of performance. If the other party accepted your goods or services, paid some invoices, or referred to the deal in writing, those facts contradict the denial. A party who received the benefit of an oral agreement is also often barred from hiding behind the statute of frauds.

Can a written contract be changed by a verbal agreement?

Often, yes. A written contract may be modified by an oral agreement that the parties have carried out, or by an oral agreement supported by new consideration unless the contract expressly forbids oral modification. (Civ. Code, § 1698, subds. (b), (c).) The modified contract must still satisfy the statute of frauds if it falls within one of its categories.

Talk to a California breach of contract attorney

If a verbal agreement has been broken, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is located at 327 Magnet, Irvine, CA 92618, and represents businesses in Orange County, Los Angeles, and throughout California.

This page provides general information about California law and is not legal advice. Outcomes depend on the agreement, the facts, and the court.