The days of handshake agreements and honour among gentlemen are coming to a close. As the century draws to a close many people have decided that "getting it in writing" is the best form of legal protection. Despite this attitude, verbal agreements may still have some weight depending on their circumstances.

A Family Money reader from Donegal asks: "Is a verbal promise to a bank legally binding?" Without more specific details it impossible to advise Ms W in this case but the general principle of verbal agreements is set out in Irish law.

According to the European Consumer Centre's legal adviser, Mr Colin Daly, it depends on the context. In some cases verbal contact may be considered a condition of the contract and is therefore legally binding. Many contracts are verbal but it can be difficult to prove a verbal contract exists.

For example, if a retailer selling goods to a customer claims that a product is suitable for a certain purpose then the customer can rely upon that promise as a condition of the contract with the retailer under the Sales of Goods and Supply of Services Act 1980.

If the customer later discovers the product is not suitable for the promised purpose they may claim that the retailer gave a verbal promise as to the product's use. Should the retailer refuse to reimburse the customer they may be taken to the Small Claims Court and the customer may claim that a verbal contract was broken.

The difficulty for the customer is proving that a verbal promise was made. Unless there were witnesses present, it's a matter of "he said, she said". The recent wrangle between AIB and the Revenue Commissioners as to whether an arrangement existed between them relating to AIB's DIRT tax liabilities illustrates the difficulty in proving verbal agreements.

"Although verbal contracts are frowned upon it doesn't stop them from being a valid contract," says Mr Daly.

A&L Goodbody associate solicitor, Mr Joe Kelly, says there are three essentials which determine the existence of a contract: issue of an offer, acceptance and consideration for the offer. People in our reader's situation must ask themselves if: they made an offer to the bank which constituted a promise? If so, was it accepted by the bank? Did any money change hands or did either party act to their detriment in relying on the promise? If the answer to any of these is yes, it may be determined that a verbal contract exists.

If, however, land is involved, there is no binding contract. Under an extremely old piece of legislation, the Statute of Frauds 1695, an agreement to buy or sell land must be in writing. The written contract must also include the three agreed Ps: price, property and the (relevant) parties, says Mr Kelly.

Ms W should contact her solicitor for advice on her particular circumstances. Alternatively, the legal aid board or money advice and budgeting office (MABS) in her area should provide relevant information.