What are my rights under a verbal contract?

UPDATED: Jan 23, 2015

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What are my rights under a verbal contract?

I entered into a 3 way partnership with 2 people when they were about to loose a hair salon. I paid 4 months towards the lease on the property and we agreed that when profits were generated we would split it 3 ways. My other 2 partners are now not responding. I want to know what legal recourse I have. This was a verbal agreement. I do have my checks as proof but no written contract.

Asked on January 23, 2015 under Business Law, Maryland


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

While there are a few exceptions, as a general matter, an oral contract (that's the better term than "verbal") is as enforceable as a written contract, so you should have the same rights as you would have if the contract had been written down--i.e. the right to sue your partners for breach of contract, to get what you should receive (such as a share of the profits); you could also potentially sue them for promissory estoppel (breach of promises made to induce you to invest), fraud (lying about what they were going to do), and unjust enrichment (unfairly profiting, or being enriched, at your expense).

The issue is more proof than legality: it can be difficult to prove the terms (what was agreed to) of an oral contract if the other parties to the contract dispute your version, since then it becomes  a matter of "he said, she said," where the court has to weigh credibility.

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