Verbal agreements are a standard feature of business across Nigeria and Africa, often born out of speed, trust, or informal networks. Yet, relying on memory and goodwill exposes small and medium-sized enterprises (SMEs) to severe cash flow disruptions, unpaid invoices, and protracted legal battles.
Under Nigerian contract law, verbal agreements are legally binding, provided there is an offer, acceptance, consideration, and a clear intention to create legal relations. However, proving the exact terms of an unrecorded conversation in court is exceptionally difficult, often reducing disputes to one partner’s word against another.
For an SME operating on thin margins, the commercial cost of a verbal dispute goes beyond legal fees. When a client disputes the scope of a verbal variation order, work stalls, cash collection is delayed, and executive time is diverted from growth to conflict resolution.
The high cost of unrecorded business handshakes
Consider a Lagos-based software development agency that verbally agrees during a phone call to add three new features to a client’s e-commerce platform. The agency assumes the client will pay for the extra hours, while the client believes the features are included in the original project fee.
Without written proof of the agreed variation, the agency faces two poor choices: absorb the cost of the extra work, which erodes its project margin, or withhold the features and risk the client refusing to pay the final balance of the main contract.
A similar vulnerability occurs in supply chains. An Abuja-based logistics company might verbally agree to a temporary discount for a regular distributor during a fuel shortage, only for the distributor to demand the lower rate permanently when market conditions normalize.
Three practical ways to secure a verbal deal
Documenting a verbal agreement does not require a formal, multi-page contract drafted by an expensive legal team. SME owners can establish a legally admissible paper trail using everyday communication tools immediately after a conversation ends.
First, implement the “contemporaneous email” rule. Send a written summary of the conversation to the other party within hours of the discussion, clearly outlining the agreed terms, responsibilities, and financial commitments.
Use clear, non-confrontational language to state the purpose of the email. For example: “To confirm what we just agreed on our phone call, we will deliver the extra design mockups by Friday, and you will pay an additional fee of 250,000 Naira upon delivery.”
Second, require an explicit response. End the email or messaging thread with a direct request for confirmation, such as: “Please reply to this message to confirm you are aligned with these terms so we can begin the work.”
Third, leverage digital messaging platforms carefully. Under Section 84 of the Nigerian Evidence Act, electronic records, including WhatsApp messages, Slack threads, and text messages, are admissible in court, provided their authenticity can be verified.
Common traps that invalidate written follow-ups
The most frequent mistake SME owners make is assuming that merely sending a message is sufficient. If the other party does not reply, or replies with an ambiguous phrase like “noted,” proving mutual agreement remains difficult.
Another common trap is failing to specify critical commercial terms. A follow-up message that says “we will handle the logistics for you” is too vague to resolve a future dispute about who pays for customs clearance or warehousing costs.
To avoid this, ensure every confirmation record covers the essential elements: the specific deliverables, the exact payment terms, the timeline for execution, and who bears any additional operational costs.
Finally, do not let business relationships prevent documentation. Founders often avoid sending follow-up emails because they fear it signals a lack of trust, but framing the record as a tool for mutual clarity and project alignment removes any awkwardness.
To protect your operations, instruct your management team to make no commitments on phone calls or in physical meetings without sending a written confirmation message before the end of the working day.
