Is a Handshake or Verbal Agreement Legally Enforceable in Alberta?

Verdict

Usually yes, a handshake or spoken agreement can be legally binding in Alberta, but the answer changes for certain contract types and gets harder to enforce the moment the other side disagrees about what was said. For contracts covered by the Sale of Goods Act, RSA 2000, c S-2, the law is explicit: a contract of sale “may be made in writing… or by word of mouth or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties” (s 5(1)). A verbal deal to buy or sell goods is not automatically invalid just because nothing was written down.

The statutory basis

Section 5(1) of the Sale of Goods Act confirms that spoken agreements for the sale of goods count as real contracts in Alberta, the same as a signed document. This is the clearest primary-source confirmation available for the “handshake deal” scenario: no special writing is required to form the contract itself.

The complication sits in section 6(1). For sale-of-goods contracts above a set dollar value, the Act says the contract “shall not be enforceable by action” unless one of three things happened:

1. The buyer accepted part of the goods and actually received that part.
2. The buyer gave something “in earnest” (a deposit) or made a partial payment.
3. There is a signed note or memorandum in writing of the contract, signed by the party being sued or their agent.

In plain terms: the verbal agreement can exist and be valid, but without one of those three things, a court will not enforce it through a lawsuit once the dollar value crosses the threshold. This article could not confirm the exact current dollar figure in the Act’s present consolidation, so treat any transaction of meaningful value as being at risk if nothing was delivered, paid, or written down.

When a written contract and a verbal promise overlap

Many disputes are not about a pure handshake deal but about a side promise made alongside a signed contract, for example a verbal assurance made during negotiations that never made it into the final document. The Supreme Court of Canada addressed this in Hawrish v Bank of Montreal, 1969 CanLII 2 (SCC), holding that a separate oral (collateral) agreement can still be given legal effect if it is independent of the written contract and does not contradict it. This principle applies across Canada, including Alberta, and it cuts both ways: an oral term that conflicts with what the written contract actually says will not be given effect over the written terms.

Why the verdict still depends on proof

Even where the law says a verbal agreement is valid, enforcing it in practice depends on convincing a court what was actually agreed. None of the sources reviewed for this article change that basic reality: a contract that exists in principle under section 5(1) still has to be proven in fact if the other party disputes the terms, and section 6(1)‘s part-delivery, part-payment, or signed-note requirements exist specifically because sale-of-goods disputes above the threshold are hard to resolve on word alone.

What you can do next

If a verbal agreement needs to be enforced, the practical options are the same ones any contract dispute involves: gather any evidence of part performance (a partial payment, a deposit, goods already delivered and accepted), look for any written trace of the deal (an email, invoice, or text message referencing the terms), and if the dispute involves land, a guarantee, or another specialized contract type, treat the written-form requirement as an open question and get advice specific to that transaction before assuming a handshake will be enough.