No Contract, No Agreement - Can A 'Friendly' Agreement or Contract Be Enforced?

In usual cases, arrangement between two or more parties are reduced to an agreement or contract in writing, which is signed by the parties involved and stamped accordingly. Examples of such agreements are Sale and Rurchase agreements and Loan agreements. However, agreements which are not reduced to writing are also enforceable against the party who breached the term of the said agreement.

This type of situation occurs when the individuals concerned enter into a friendly arrangement where one party lends money or performs an act for the other party in return for some consideration, which is usually in form of money and this arrangement is founded purely on the trust and goodwill.  Nevertheless, if there is an act performed pursuant to a promise or consideration, either monetary or non-monetary, the agreement, although not reduced to writing, is still a good contract which can be legally enforced as long as the parties had the intention to enforce the agreement legally.