A Handshake Deal Is Enforceable in California.

The Problem Is the Clock.

People ask me all the time whether a handshake deal “counts.” In California, it usually does. California law allows most contracts to be made verbally, with no paperwork at all (Cal. Civ. Code § 1622). If you both agreed on the essential terms and intended to be bound, you generally have an enforceable contract.

So the real danger usually isn’t whether your deal is valid. It’s how long you wait to do something about it.

For Most Handshake Deals, You Have Two Years, Not Four

If a deal is in writing, you generally have four years to sue if the other side breaks it (Cal. Code Civ. Proc. § 337). If the deal was oral, you generally have two years (Cal. Code Civ. Proc. § 339(1)).

That clock usually starts on the day the other person breaks the deal, not the day you finally get fed up. If payment was due in installments, each missed payment may start its own clock.

Here’s how that plays out. Say you did $18,000 worth of work for a friend’s business based on a handshake deal, and payment was due March 1, 2025. If the money never came, your deadline to file a lawsuit would generally be March 1, 2027. Miss that deadline, and the debt may still be “owed,” but a court may no longer enforce it.

“He Keeps Saying He’ll Pay” Doesn’t Stop the Clock

This is the one that catches good people. The other side keeps calling, apologizing, and promising that the check is coming. Months pass. Then a year.

Under California law, once the limitations period has expired, a new promise or acknowledgment generally must be in writing and signed by the person who owes you to revive the debt (Cal. Code Civ. Proc. § 360). Phone calls and promises over coffee generally won't do it. Whether a particular text or email qualifies depends on exactly what it says, so don't assume it does.

And don't assume that verbal promises made before the deadline will extend your time to sue, either.

When a Handshake Isn’t Enough

Some deals must be in writing to be enforceable (Cal. Civ. Code § 1624). Common examples include:

• Buying or selling real estate, or leasing it for more than one year.
• Agreements that, by their own terms, cannot be completed within one year.
• A promise to pay someone else's debt.

Sales of goods follow their own rules. A sale of goods for $500 or more generally requires a signed writing, subject to certain exceptions (Cal. Com. Code § 2201). And the deadline to sue for breach of a contract for the sale of goods is generally four years, whether the agreement was written or oral (Cal. Com. Code § 2725).

If your deal falls into any of these categories, get legal advice early.

Common Mistakes

• Waiting for them to do the right thing. Goodwill doesn't pause the deadline.
• Counting from the wrong date. The clock usually starts when the other side breaches the agreement, not when you decide to take action.
• Trusting verbal promises. Don't assume they give you more time to sue.
• Deleting texts and emails. Without a written contract, these messages may be your best proof of the deal.
• Assuming “no written contract” means no case. An oral agreement can be just as binding as a written one.

Quick Self-Check

• Do I know the date they first failed to pay or perform?
• Was that less than two years ago?
• Do I have texts, emails, invoices, payment records, or witnesses?
• Did they ever acknowledge the debt in writing?
• Is there anything about the agreement that might require it to be in writing?

If you're unsure about any of these, especially the first two, don't wait.

Talk to Us Before the Clock Runs Out

At Infinity Law Group, we help people enforce the deals they were promised, handshake or not. We'll look at your timeline, your evidence, and your options, and tell you straight whether you have a case.

Contact us today for a  consultation.

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