Legal Question in Business Law in California

Re: Terminating Contract ...

Your current contract may be verbal (actually, "oral" is the preferred legal term, since "verbal" literally means "with words" which could be written as well as spoken words), or it may be what is called a "contract implied in fact." This is a contract which has not been expressed with words so much as by actions. Continuing in employment after the termination of an express agreement is a classic example of an implied-in-fact contract. (Note: there are also contracts "implied in law," but that's not what we have here).

I'm researching your question and will get back to you with a follow-up reply if I find anything further that bears on your situation. For now, I think the following three items are worthy of note:

(1) The biggest issue would be whether your current contract is "at will" or another agreement for a fixed term, such as an additional year. If it is "at will," you can quit any time and you don't have to worry about any formal termination agreement. I think it probably is "at will," but I don't have all the facts.

(2) A contract for personal services cannot be specifically enforced; see Civil Code section 3390.

(3) An unwritten contract for personal services cannot result in an injunction against you, per Code of Civil Procedure section 526.

The combination of (2) and (3) would leave the client with only one option; to sue for money damages. I think it would be hard to prove any money damages resulting from you quittting. Even though you may feel you are very valuable to the client, you are presumably charging what you are worth, and it would be hard for them to argue that they were paying you less than your value. Further, courts generally consider claims of the sort the client would have to be making as too speculative to be the basis of an award of money damages.