Legal Question in Business Law in Massachusetts

Re: Verbal agreement combined with written agreement

Clearly, you are in a murky situation. Does the written contract control? If yes, but, the missing part of the contract is very important, namely, when does or has your interest vested.

Lets start at the beginning again. An attorney needs to read the contract and speak with you about your legal rights.

If you care to make an appointment, please call.

Allan McPhee (310) 698-8280

www.PVAttorney.com

Re: Verbal agreement combined with written agreement

Your question does not and perhaps could not give enough details to permit a specific answer. However, I can give you some general guidelines regarding interpretation of written contracts and the use of extrinsic evidence (such as oral understandings) to explain or modify the contract.

First, a partnership agreement is a kind of contract, and in general contract law applies to their construction, interpretation and enforcement. However, all states have a substantial body of partnership law that will apply as well, including, in most states, the Revised Uniform Partnership Act. The RUPA has some provisions for 'filling in the blanks' in partnership agreements that are incomplete.

A contract may or may not contain a so-called 'integration clause' stating that the written instrument is the entire agreement. If so, it is much harder to use outside material. However, if the writing is facially defective (either incomplete or ambiguous) external (oral or written) evidence can be used by a court to explain or complete the written contract.

So, in deciding the issue you mention, the court might be required to look outside the 'four corners' of the written agreement either to (1) supply a necessary term, or (2) explain an ambiguous provision. In so doing, the court could look to the RUPA, oral agreements or testimony, common sense, the conduct of the parties, or any of the above.

Re: Verbal agreement combined with written agreement

A typical partnership agreement will have an integration clause -- i.e., that this document is our complete agreement about this transaction (obviously, this is not legal language but conveys the effect). If your written agreement contains such a clause then it is difficult (but not impossible) to convince a judge that there is a "side by side" verbal agreement on vesting of shares. Odds are against you if the other three partners insist that no such agreement is made, but if the judge is convinced that the written document is defective or that terms are ambiguous, then he/she may allow outside evidence to substantiate your position. From your zipcode it appears you are in CA- look at the CA adaptation of Uniform Partnership Act (or other statutes) for some guidance.

Re: Verbal agreement combined with written agreement

Unfortunately, your question raises more questions before I could give you an answer. Thus, as clients discover from relations with attorneys the answer is "maybe", "it depends".

You need to sit down with an attorney and discuss all of the details. THe attorney needs to see the written contract and also be told what the nature of the oral agreement/understanding is to get a basic idea of whether there is a conflict between the terms of the written agreement and the oral agreement.

Further, I am not sure what you mean by "vesting" in terms of their partnership interest. This will depend upon the written contract.

Definitely, call an attorney to discuss this matter if there are any significant amounts of money or potential liability involved.

I would be happy to discuss this with you.

J. Caleb Donner

LEGAL WARRIORS (R)

805-494-6557