Oral Contracts

Oral contracts are as common as coffee houses.  They 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 has successfully proven the validity of oral contracts for a wide range of clients involved in business and domestic disputes.

Common Disputes in Oral Contracts

A common dispute that arises in an oral contract concerns the terms of the agreement. The most convincing evidence that the court will look to is the parties own conduct in performing the agreement before the dispute developed. If the parties had similar dealings in the past, the court will consider the parties' prior "course of dealings" to determine what they had agreed to before the dispute.

Unenforceable Oral Agreements

Under California law, 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

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 in fairly short order.

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 are still have 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

There are a number of differences between oral and written agreements, and oral contracts have a shorter statute of limitations. 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 a 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

Lepine Law Group accepts cases many attorneys won’t touch: oral contracts.  The firm has been successful at proving these cases, in which the most convincing evidence is the conduct of the parties; what they did before and after the oral agreement was reached.  Often, it is the defendant who demonstrates to the jury that a contract was entered.

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 called Agripost. The plaintiff, Jim Buckley, sued Arie de Jong after his former friend refused to honor their agreement. Arie’s right hand man had sent Jim a resume and had looked at office space with him to house the compost business. De Jong paid for Agripost marketing materials with checks he signed personally. The jury was convinced and awarded $2,800.000 to Plaintiff Jim Buckley.

In the domestic arena, oral contract disputes are known as Marvin actions, named for the late Lee Marvin and his common law wife who brought suit against him. Lepine Law Group has successfully litigated these types of cases as well.  In one such case, Guadalupe de Prado 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, Antonio Peralta tried to evict her. The jury heard each side give their version of the story, saw that she had withdrawn her support request, and awarded her the equivalent of the cost of her rent for life.

In a more recent case, Gina Tomasello sued James Keller 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 Gina’s own company had gone bankrupt due to her absence, and awarded her $600,000 for her share of the equity.

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