Oral Contracts

Oral contracts are as common as coffee houses. In fact, every time you eat at a restaurant or get your hair cut before paying you have engaged in an unwritten contract. These agreements regularly arise in business relations or in a domestic setting between intimate partners. In business, oral contracts are often relied upon by parties that have previously done business with one another, or who have known each other over long periods of time. Between intimates, they usually develop when couples start their domestic planning. While these agreements are legally binding, disputes are not uncommon, and enforcing an oral contract can be disastrous if the litigation is not objectively assessed and planned. LEPINE LAW GROUP has expertise in all aspects of contract law in California and other states and has successfully enforced unwritten contracts for a wide range of clients.

Common Disputes in Oral Contracts

In both business and intimate relationships, oral contract disputes fall into certain patterns related to the disparity of power, which usually means money. In business, there is one party with the idea, and the other one with money to invest. Unfortunately, the passion the “idea guy” has for their project is used as a carrot to elicit work, and then when it’s time to pay, the monied party denies there was any agreement or claims that the other party was somehow paid for their contribution. In these cases, the most convincing evidence is the parties’ own conduct in performing the agreement before the dispute developed, their prior "course of dealings.” These cases are also document-intensive. There is no one document that spells out the terms of the agreement, instead there are a million emails, text messages, and other pieces of evidence that, when pieced together, create a clear picture. Like a Monet painting.

Unenforceable Oral Agreements

In California and other states, some verbal agreements are unenforceable, including agreements that are illegal in nature or that violate federal, state, or local law. In addition, both parties must understand what they are agreeing to; if either party has misunderstood a material term of the oral contract, the agreement is invalid. Oral contracts that are too vague, lacking specifics, are also unenforceable.

Statute of Frauds

All states have some version of this statute. Under California's statute of frauds, certain transactions are invalid unless there is a written contract, including:

  • An agreement that is not to be fully performed within a year from its making
  • A lease lasting longer than one year, or a contract for the sale of real property
  • An agreement by a purchaser of real property to pay an indebtedness secured by a mortgage
  • An agreement to loan money or extend credit in an amount greater than $100,000 made by an individual engaged in the business of lending money or extending credit

The statute of frauds also invalidates an unwritten promise to pay for another's debt, an oral agreement authorizing an agent to purchase or sell real estate, or to lease real estate for more than one year, as well as an agreement that is not intended to be fulfilled during the promisor's lifetime.

At LEPINE LAW GROUP, we know our way around the statute of frauds and can assess the strength of your case with accuracy.

Domestic Disputes

If a dispute arises between unmarried parties, including same sex partners, who have a long-term relationship, verbal or implied promises of support or property may be valid. These disputes are known as Marvin actions, named for the late Lee Marvin, whose common law wife was the first person to have her domestic agreement recognized as a contract. Prior to that, the courts would regularly dismiss such cases on the (faulty) premise that the contract was invalid because it included the exchange of money for sex. Marvin actions have come a long way since the 1970’s. Now the bench recognizes that just because parties are intimate, they don’t lack capacity to consent and to bind themselves by the terms of a contract.  

How the Lepine Law Group Can Help You Enforce an Oral Contract

Oral contracts have a shorter statute of limitations than written contract. Enforcing an oral contract means providing convincing evidence of what the parties did before and after the agreement was reached. Often, it is the conduct of the defendant that demonstrates to the jury that a contract is valid. If you are involved in a dispute over an oral agreement you should contact LEPINE LAW GROUP today.

Recent Cases

Most law firms won’t touch oral contracts. They find them too risky. But Lepine Law Group has been successful at proving these cases, in which the most convincing evidence is usually the conduct of the parties; what they did before and after the oral agreement was reached. Often, it is the defendant who makes the best witness for enforcement.

The first oral contract Lepine Law Group proved to a jury was a business agreement between two men of a certain age to start an industrial compost facility. The plaintiff sued after he had put innumerable hours into the project and his former long-term friend and partner, refused to honor their agreement. But the evidence was obvious: the defendant’s right-hand man had sent plaintiff a resume and had looked at office space with him to house the compost business. The defendant even paid for marketing materials with checks he signed personally. The jury was convinced and awarded $2,800.000 to the “idea guy.”

In the domestic arena, Lepine Law Group has successfully litigated these types of cases as well.  In one such case, plaintiff sued the father of her child who had promised her she could live in one of his bungalows if she dismissed her request for state enforced child support. She did as he asked, but after their child had graduated from college, the defendant tried to evict her. The jury heard each side give their version of the story, saw that she had withdrawn her support request for government support, and awarded her the equivalent of the cost of her rent for life.

In another case, a plaintiff sued her former spouse for stringing her along saying he would marry her and put her name on the title of the rental properties she helped him locate, renovate, and manage for ten years. The jury heard both sides, heard evidence that plaintiff’s own company had gone bankrupt due to her absence working on their joint projects, and awarded her $600,000 for her share of the equity.

More recently, Lepine Law Group has been assisting oral contract plaintiffs outside of California. One recent case involving a commercial real estate joint venture settled in mediation for seven figures without going to trial. Another client involved in a dispute for their interest in medical marijuana corporations is consulting with our counsel to ensure enforcement of the parties’ agreement.

Amy Lepine has been successful in these cases in California and other states because if she is convinced of the facts, she can convince a jury of them. She partners up with plaintiff’s lawyers in jurisdictions outside of California to be able to prosecute these cases in other parts of the country. Ms. Lepine enjoys representing David against Goliath in these cases and considers it an honor to help balance the growing wealth disparity.

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