Legal Question in Business Law in Oregon

Oral invesmetn agreement

I have a small business which runs hotdog carts. last spring a man we met wanted to invest in our company. An oral agreement was entered into. He was the money (silent partner)we were the labor, knowledge etc. He purchased 10 carts as part of the investment in our co. We signed for. received, stored the carts and began to hire employees and find locations for carts. Within 3 months-He had taken one of our employees as a partner, insisted we change our business and our role in the business. He said he had a better place to store the carts and took back 4, then stating he had buyers took back 4 more. We have 2 remaining carts which are in operation. We believe these carts should remain in our company, as we spent nearly $10,000 paying employees, storag etc. and all the carts were initially an investment in our company and in our custody and control. He received knowledge of operations from us and is now competing with us. He opened a deli using our name. He is now asking for the last two carts. How should we proceed?


Asked on 2/06/09, 8:57 pm

1 Answer from Attorneys
Daniel Meek Daniel W. Meek

Re: Oral invesmetn agreement

You should get an attorney.

The first mistake (by all involved) was doing business without a written agreement. Now you say can one thing, but he will say the opposite, and there is probably no objective proof of who is telling the truth.

You probably cannot prevent him from having a deli business, but you might be able to stop him from using your name. Did you register it with the State as an assumed business name? If so, then sue him for infringing that name. If not, you can still sue him for common law "appropriation" of your name and business reputation.

Then again, he has some problems as well. You have 2 of the carts, and he may have a hard time proving that he is entitled to get them back right now. He may have receipts for them, but then again you may have received their pursuant to an (oral) agreement that you would have control of the carts for a period of 5 years or whatever.

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Answered on 2/08/09, 4:29 am


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