Legal Question in Business Law in California

First, I'm going to assume that the oral agreement was for sale of an interest in the houseboat, placing the deal under the Commercial Code. If it were indeed a partnership agreement, i.e., if the two of you intended to operate the houseboat as a business, the applicable law would be the Revised Uniform Partnership Act, a part of the Corporations Code. The significance is that partnership agreements don't have to be in writing. Contracts for the sale of goods, such as an interest in a houseboat, should be in writing per Commercial Code section 2201(1) if the price exceeds $500 -- but there are loads of exceptions, including those listed in subsection (3) of section 2201.

Here, it looks as though the seller has admitted that a contract was formed. Hopefully, you will have made some notation on some or all of the ten checks you wrote, indicating that they were payments on the houseboat deal, or words to that effect. This should get you under the exception from a written contract described in 2201(3)(c). Alternatively, if the seller admits there was an oral contract, you can claim the exception in Commercial Code section 2201(3)(b).

In preparation for going to Small Claims, I suggest you do the following: (a) Get and study a copy of Nolo Press's "Everybody's Guide to Small Claims Court in California; (b) look up Commercial Code section 2201 and determine whether you have a way around the written contract "requirement;" and (c) prepare well for your Small Claims hearing, including gathering and copying all deal documents (canceled checks, e-mails, etc.) and bring witnesses who can testify to the existence and terms of the agreement.