Legal Question in Administrative Law in California

Re: Are verbal contracts legal?

Verbal contracts (technically, "oral" contracts) are generally enforceable. Enforcement is hampered by problems of proving the existence and terms of such contracts. If the judge or jury believes the plaintiff, the plaintiff can get a verdict and judgment against the defendant.

There are two main classes of oral contracts that are not enforceable, or at least not easily enforced-- (1) contracts falling under the "statute of frauds" and (2) in California, contracts for sale of an interest in real estate.

The statute of frauds requires that "contracts that cannot be performed within one year" be in writing and signed by the defendant. Since your contract is for one year, the statute of frauds does not seem to apply.

Unless you have another defense, you are probably liable for the early termination fee.