Is a verbal agreement with a contractor legally binding?

Yes, verbal agreements with contractors are legally binding in Ontario, but they're extremely difficult to prove and enforce - which puts you at serious risk as a homeowner.

Under Ontario contract law, verbal agreements can be legally valid, but the challenge lies in proving what was actually agreed upon when disputes arise. Without written documentation, it becomes a "he said, she said" situation that's costly and time-consuming to resolve through legal channels.

Why Verbal Agreements Are Risky in Ottawa Construction

The Ontario Consumer Protection Act requires written contracts for home improvement services over $50. This isn't just a suggestion - it's the law designed to protect homeowners. Any reputable contractor working in Ottawa should provide a detailed written contract without hesitation.

More importantly, the Construction Act (formerly Construction Lien Act) in Ontario gives contractors lien rights against your property. If payment disputes arise from a verbal agreement, a contractor can potentially place a lien on your Ottawa home, even if the disagreement stems from unclear verbal terms about scope, materials, or pricing.

What Ottawa Homeowners Need in Writing

Every legitimate contractor agreement should include specific details: exact scope of work, materials specifications, timeline, total cost breakdown, payment schedule, permit responsibilities, and warranty terms. For projects requiring permits through the City of Ottawa (613-580-2424), the contract should clearly state who obtains permits and handles inspections.

The payment schedule is particularly crucial. Ontario's Construction Act allows for a 10% holdback that must be retained for 60 days after substantial completion. Verbal agreements often lack these important legal protections.

Red Flags When Contractors Avoid Written Contracts

Be extremely wary of any contractor who says "we can just shake on it" or "paperwork isn't necessary for a small job." This is often a sign of unlicensed operators or scam artists. Legitimate contractors carry WSIB coverage and liability insurance - protections that only apply when there's proper documentation of the work agreement.

For electrical work, only Licensed Electrical Contractors (LEC) can pull ESA permits in Ontario. You can verify their credentials at esasafe.com/contractor-locator. Similarly, gas work requires TSSA certification, verifiable at tssa.org. Licensed professionals always provide written agreements.

Protecting Yourself in Ottawa

Before any work begins, ensure you have a written contract signed by both parties. The contract should reference any required permits from the City of Ottawa, and verify the contractor's licensing through appropriate Ontario authorities (ESA for electrical, TSSA for gas/HVAC).

If a contractor has already started work based on a verbal agreement, immediately document everything in writing - send an email summarizing what you understood was agreed upon and ask for written confirmation. This creates a paper trail that could be valuable if disputes arise.

For consumer protection support, contact Ontario's consumer protection office through ontario.ca/consumer if you encounter problems with verbal agreements or contractor disputes.