Legal Question in Credit and Debt Law in California

Promissary note vs. verbal contract re: debt dispute

I am researching a little advice for my motherinlaw.

She has a promissary note with a vendor in the amount of $5000. She provided service work based on commission of sales. That agreement was ammended verbally by the CFO of the company (who is no longer working there) such that if her company did not make back the costs of the service work through those commissions the vendor would reimburse her for her labor costs.

Once the vendor did not honor their verbal contract, she stopped payment on the promisary note because the vendor actually owed her more than she owed them on the promisary note.

From their perspective there was never a verbal contract. They have had several collections agencies pursuing this. She is ready to go to court over the issue. Does she have any recourse?

Thx in advance.

Charles


Asked on 1/15/02, 3:44 pm

2 Answers from Attorneys
Ken Koenen Koenen & Tokunaga, P.C.

Re: Promissary note vs. verbal contract re: debt dispute

Her only recourse is to go to court and argue her side. Se if she can get an affidavit from the previous CFO or any evidence that this is how other service workers had worked in the past. They are obviously in a stronger position with the note, but going to court is the only choice.

She might want to strike the first blow by going to small claims court and sue for the maximum of $5000. She won't come out ahead, but at least she could offset the amount on the note and get everyone off her back.

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Answered on 1/15/02, 3:50 pm
Larry Rothman Larry Rothman & Associates

Re: Promissary note vs. verbal contract re: debt dispute

While oral agreements tend to be harder to prove than written contracts, they are still legal and enforceable. If the amount in dispute is less than $5,000, I suggest you file in small claims court. If the amount is greater, please fax me the documentation that you have and I will be happy to provide you with free consultation.

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Answered on 1/15/02, 4:21 pm


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