Is A Verbal Agreement Valid In Cyprus? What Courts Consider Legally Binding

Verbal agreements are standard in business and everyday transactions. But are they actually enforceable under Cypriot law?

The short answer is yes. A verbal agreement can be valid and legally binding in Cyprus, provided that certain legal conditions are met. However, the lack of written proof can make enforcement more difficult. Below, we outline when an oral agreement holds weight in court and what you should be aware of when relying on one.

What makes a verbal agreement legally binding?

Under Cyprus contract law, an agreement, whether written or oral, must meet specific requirements to be recognised as a contract:

• Offer and acceptance: One party must clearly make an offer, and the other must accept it.
• Intention to create legal relations: Both parties must intend to be legally bound by their agreement.
• Consideration: There must be a benefit to both sides (for example, goods, services, or payment).
• Capacity: Both parties must be legally capable of entering into a contract.
• Legality: The subject of the agreement must be lawful.

If these elements are present, then the absence of written documentation does not invalidate the agreement.

What does the Court look for in a dispute?

If a verbal agreement leads to a legal dispute, the Cyprus courts will evaluate the evidence presented. Since there is no written contract to refer to, courts will examine:

• Witness testimonies
• Email or text message exchanges
• Payment receipts
• Actions taken by both parties
• Course of dealing or previous behaviour

The goal is to determine whether a contract existed and, if so, what its terms were. The court may consider surrounding circumstances, mainly if both parties acted in ways consistent with having an agreement.

When does the Law require a Written Agreement?

While verbal contracts are generally valid, some types of agreements must be in writing to be enforceable, such as:

• Real estate transactions
• Transfer of shares in a company
• Certain employment terms
• Loan agreements above a specified amount
• Long-term leases

Failing to formalise such agreements in writing may render them unenforceable under Cyprus law.

Common situations involving verbal agreements

Cyprus courts have heard cases involving verbal agreements in various contexts, such as:

• Business arrangements between partners
• Informal loan agreements between individuals
• Verbal employment contracts
• Agreements over services (like construction, renovations, or delivery of goods)

While the law recognises these, the burden of proof is always higher for the party seeking to enforce an oral contract.

Legal advice for businesses and individuals

If you rely on verbal agreements in Cyprus, it is strongly advisable to keep written records of all communication, even informal ones. Email confirmations, WhatsApp chats, or even SMS exchanges can be helpful in proving the existence and terms of an oral contract.

For high-value transactions or ongoing obligations, it is always safer to formalise your agreement in writing with a legal professional.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.