Legal Question in Business Law in California

Re: Breach of Verbal Contract

Next time, get it in writing.

Re: Breach of Verbal Contract

What is your relationship with the old management and the new investors? If you can work it out without litigation, that will be best. If they are adamantly denying your rights, however, you need to see a lawyer, and sooner rather than later.

Re: Breach of Verbal Contract

Verbal agreements in value above $500 are generally not enforceable. If you can prove that you have performed under the verbal agreement and they have benefited therefrom, then in many states you would have a claim for some level of damages resulting from your reliance and their acceptance of your performance. Our CA attorney could go over your options with you.

Re: Breach of Verbal Contract

It depends on the strength of your evidence. You should have an attorney represent you in the negotiation. You don't write what it is they are selling, but you may have a credible claim to the inventions and trade secrets. If you will do, they may be willing to pay you more than they are offering now. Feel free to contact me at the email below if you want to discuss this further -- initial consultation is free.

Re: Breach of Verbal Contract

The previous answers don't seem particularly helpful, especially the one from the out-of-state attorney who is misquoting California's law with respect to oral contracts and the statute of frauds.

To me, the most helpful fact you've given is that the corporation compensated you with shares of stock. If true, you have rights as a stockholder. If the company has undergone a recapitalization, and the other founders got something for their shares, you'd be entitled to the same. Or, perhaps, the company has just continued to crank out new shares, diluting your interest down to near nothing, like a third-world country printing money with ever more zeros to fuel hyperinflation.

California does enforce oral contracts with a few major exceptions. Many sales of goods for amounts in excess of $500 must be evidenced by a writing of some kind, and most agreements to convey interests in real property must be in writing. However, your biggest problem is the statute of limitations for oral contracts is two years from the time of breach (not from the time the agreement was made).

There is also a theory called "quantum meruit" (legal Latin for "what it was worth") upon which someone can be reimbursed for services rendered if failure to reimburse would unjustly enrich the other. Your case would seem to fall under this heading.

So, I believe a properly prepared and presented case would result at least in your receiving money compensation for your services, which you say are well documented, and possibly at least partial recognition of your shares and equity participation in the company. Minority shareholders don't have much power or many rights, but they certainly have some, including the right to participate equally in dividends, distributions, and shares issued in a recapitalization.

Please contact me with particulars; I am well versed in the legal aspects of minority shareholder rights (partly from personal experience) and I can give you a free consultation based upon all your facts.

Re: Breach of Verbal Contract

To try to enforce your verbal agreements. If the company doesn't resolve it with you, hire an experienced employment rights attorney to help. You may have to file suit. Feel free to contact me for help; this has been a speciality of my practice for over 20 years.

Re: Breach of Verbal Contract

Yes, you have an enforceable claim. As the previous answers indicated, an oral contract that has already been performed on your part is enforceable and not subject to the statute of frauds. However, your ability to prove that you had the contract, and what the terms are, will depend on your credibility, whether the founder/chairman will confirm your testimony or dispute it, and the strength of your other evidence. You also have an alternative claim for the reasonable value of the services you rendered, which also is dependant on the evidence you have as to what those services were and the benefits conferred on the corporation. As is expected, there are many details which you could not possibly have stated in a brief presentation of your question to enable any competent attorney to give a fair evaluation of your claim. However, your best course of action is for you to retain a California attorney to review your claims and the evidence available to you, and to have that attorney present, in as strong terms as you can back up, your demands. Hopefully, this will lead to serious negotiation, possibly mediation, and a fair settlement. Otherwise, your recourse is to litigation or voluntary arbitration (both of which can be expensive for both sides). In any event, you need an attorney to advise you and represent you (if only to let the company know you are serious).

Re: Breach of Verbal Contract

I'm curious as to why they are wanting you to sign a release. What do you think you are owed? Do you have any documents to support that?

We would be interested in discussing your case with you at no charge. Feel free to call or email. We practice business law out of Newport Beach.