Can I sue/revoke agreement from an accountant for malpractice?

UPDATED: Oct 2, 2022

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Can I sue/revoke agreement from an accountant for malpractice?

I am a small business owner of several shops in
Portland. I ‘contracted’ an accountant both for taxes
and for business. We didn’t pay them because we
verbally agreed they would receive a percentage of
the company as an investor. No contract was legally
written. We recently found out that they didn’t
process the federal and state taxes correctly and
now we have to pay back taxes plus many fees.
They want out of the investment and now are
demanding their percentage. Are they entitled to
money? Can I counter sue if they sue me? Or are
they bluffing with a lawsuit?

Asked on August 4, 2019 under Business Law, Oregon


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Oral or unwritten contracts are enforceable: a contract does not have to be written (with certain exceptions: contracts to buy real estate must be in writing, for example). 
However, if the agreement was that they would receive compensation in exchange for (among other things) doing your taxes, and they did the taxes incorrectly, costing you money, they breached or violated the agreement: implicit in the agreement that they would be compensated (e.g. get a percentage of the company) is the requirement that they do the taxes to acceptable professional standards. A failure to do them properly therefore would be a breach of that obligation and allow you to terminate the agreement without proving them the compensation (share of your business).

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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