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verbal agreement - it is it legally binding?

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Tracie Sharp
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Posted: 20th Apr 2012 - 08:45 Quote

Hi Guys

Hope someone can help me with a nasty little problem that may arise.

When my husband and i set up our business in Oct 2010, we were really good friends with a person. We did say to them that if the business really took off, then there may be a chance for him to help us and be part of the team. It has took off, but at the moment there is not enough work for my husband and him. My husband has had to give up his full time job to solely concentrate on our business. We have not made any money in the first year, but may break even on the 2nd but who knows.

This other person has now said that he is taking us to court as we had a verbal understanding saying that we would take him on, and he just thinks we are being greedy!!!

I just want to know how we stand? The business is in France, and both the owner of the lake and the bailiff we have got out there does not want this other person having anything to do with the business as they think it would be bad for the business (not knowing the product, no customer skills etc).

Can anyone please help

Thanks Tracie

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Adam Keith
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Posted: 20th Apr 2012 - 09:02 Quote

A verbal agreement is legally binding, however proving what was said and agreed is another matter entirely.  Unless he has a recording he doesn't have a leg to stand on and is going to waste his money on legal fees. 

Since you said that if the company takes off he may be able to join you, it is totally down to you when you feel the business has taken off and can support more staff, if you feel that the company has not reached that point, again he is wasting his money. he has his work cut out finding a solicitor who would even entertain taking the case in the first place.

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Tracie Sharp
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Posted: 20th Apr 2012 - 09:22 Quote

Cheers Keith, i think its a case of sour grapes on his side, but i want to make sure we are ok legally.

Tracie

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Posted: 20th Apr 2012 - 09:39 Quote

I'm not sure what he hopes to happen from this, it seems very bizarre. Is he hoping it will force you to take him on? Why on earth would you want to work with him now?! Is he hoping for money? - clearly there isn't any to spare. Very odd situation, it sounds like more of a let down on a personal level. I doubt anything will come of the rest of it. Focus on your business, let him do his thing. Life goes on. Hopefully he'll move on too.

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Tracie Sharp
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Posted: 20th Apr 2012 - 09:55 Quote

Thanks Natalie, i know what you mean, friends one minute and then try and stab you in the back the next when they want a piece of the action

Tracie

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Paul Handforth
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Posted: 20th Apr 2012 - 11:00 Quote

Hi Tracie

I don't know the legalities of it but I can't imagine for a second that any judge would override the decision of a company owner as to whether a separate person should begin employment in a company, whether there is a witnessed verbal agreement or not.

As company directors you have a duty to act in the best interests of the company and if employing more staff places the company in a more precarious financial position then it is not viable to challenge this duty.

Worse case scenario: a judge forces you to employ the person (which I think is highly unlikely). After a few days you make the position redundant and he gets paid his notice period - which of course you will have set at 2 weeks :-) and he gets 2 weeks pay, with no further legal claim.

Personally I don't see the point of him going down the legal route and I can't see any judge enforcing it anyway.

Hope this helps.

 

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Posted: 20th Apr 2012 - 11:18 Quote

Tracie - Is that a Sturgeon you are holding?

Totally agree with all above - except the comment
"he has his work cut out finding a solicitor who would even entertain taking the case in the first place."
There are any number of solicitors who will take on suspect cases - after all, they get paid win or loose.

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Keith Poultney DipPFS
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Posted: 20th Apr 2012 - 11:34 Quote

Tracie - if you have any concerns - talk to Peter Maynard peter@fwdlaw.com - top guy - he will let you knwo where you stand - regards Keith

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Tracie Sharp
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Posted: 20th Apr 2012 - 14:35 Quote

Thanks for all your help. Hopefully it is all hot air from him, and he is just trying to put the "frightners" on us, but i wanted to know where i stood before i tell him "to do one" as they say!

Steve - yes it is a Sturgeon, nice 23lber from our lake in France. Fancy coming over to catch a few lol.

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Peter Maynard
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Posted: 20th Apr 2012 - 14:58 Quote
Quote:

Tracie - Is that a Sturgeon you are holding?

Totally agree with all above - except the comment
"he has his work cut out finding a solicitor who would even entertain taking the case in the first place."
There are any number of solicitors who will take on suspect cases - after all, they get paid win or loose.

Sorry Steve, but couldn't let that one go!!

Virtually all of my work is paid by results.  If my clients don't get paid, neither do I, and that's just the way I like it.

To be honest, any business (whether a lawyer or otherwise) who just takes the money and runs is unlikely to have a business for much longer.

I am sure there are bad eggs in the film/video production company arena, just as there will be good eggs too (no doubt your company is one of those).

I'm keen to ensure that the odd bad egg doesn't poison the whole clutch, so to speak!!

Best regards

Peter

 

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Peter Maynard
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Posted: 20th Apr 2012 - 15:04 Quote

Hi Tracie

The comments already made certainly point you in the right direction.

Basically a verbal agreement can be binding, but the fact of the matter is that the person who wants to rely upon it must prove what the agreeement was.

And in your case, what exactly was agreed?  That you might take this person on at some time (not really specified) in the future if some criteria (again not really specified) were met.  You also need to look at the intentions of the parties.

If I said to you I will pay you £10 if you deliver a 10lb sturgeon to me at my home address by 4pm on 20 April 2012, and you deliver exactly that on time, then clearly I owe you £10.  Whether it's a verbal or written agreeement is irrelevant.

If I say that when business improves, I might like to go on a sturgeon fishing trip with you, you may be in difficulty suing me on the agreement!!

Hope that helps!!

Best regards

Peter

PS Thanks for the kind words Keith!!

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Nicola Cross
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Posted: 20th Apr 2012 - 20:40 Quote
Hi Tracy
The agreement sounds very wooly and as peter said he will need to prove the exact conversation.

Concentrate on your business, try not to let this annoyance interfere with you and your husband achieving your plans and enjoying the fruits of your labour.

All the best with your business venture. Nicola

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Ronnie Ilan
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Posted: 21st Apr 2012 - 09:46 Quote
A verbal agreement is enforceable. An agreement to agree is not. The former needs some precision on key terms (product or service, price, times or timescales and so on). From what you posted, I doubt there is any case. Friendship may be over, but that is the story of life and success.

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Tracie Sharp
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Posted: 21st Apr 2012 - 19:12 Quote

cheers for all your comments, i hope its all hot air, and will blow over lol

Tracie

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Deborah Driscoll
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Posted: 23rd Apr 2012 - 10:00 Quote

Hi Tracie.  Generally speaking, a contract requires certainty.  If that is missing in this case, it is unlikely to be a legally enforceable contract.  

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