Does a company have to honor a verbal agreement?
(KUTV) Work is nearly complete on Amanda and Brandon Brady's Coalville, Utah, home, but it seems work is just beginning on how much the home is actually going to cost them. Their bank wants to stick them with a higher interest rate then they were originally promised, Amanda Brady said.
“They offered long term lock rates," she said, “meaning you could lock your rate up to six months in advance."
They locked in their rate last November, but months later, as it's time to close they were told the program is no longer in effect, they said.
The Bradys protested, pointing out that's not what they were promised over the phone. Amanda Brady has a recording of a conversation in which you can hear a banker admit that what she'd been told was no longer true. The protests did no good.
Brandon Brady said the difference in interest rates would cost them about $20,000 over the course of a 30-year mortgage.
In a statement to Get Gephardt, the Brady's lender, Zion's Bank wrote:
Zions bank acknowledges the information conveyed verbally to the client was not part of the documentation provided to, or signed by, the client. We have taken steps to honor the verbal commitment.
Contract lawyer David Head said, yes, there can be oral contracts, but they can be very difficult to convince a judge to enforce.
“With oral contracts, they're harder to prove than a written contract. There's a lot of defenses in place to get them kicked out," he said.
Head says written documentation doesn’t necessarily have to be a contract. It could be as simple as an email from the company outlining what was agreed to, he said.
Zion's Bank says it's important to review documents carefully and to make sure expectations of agreements are received in writing.