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Oral contracts can be enforced in contract disputes

Oral contracts are generally legally enforceable. However, each state has rules specifying certain contracts that must be in writing. In contract disputes in California, moreover, an oral contract will be harder to prove if one of the parties is denying its existence. However, the existence of a contract can be legally implied by looking at the intention of the parties as evidenced by the circumstances and their regular course of dealings.

In most states, typical laws require a contract for the sale of land to be in writing. Other subjects that must be in writing can be found in the statutes of each state. There may be exceptions even to these mandates where there has been substantial performance of an oral contract by the parties.

These principles may apply in a lawsuit filed recently in New York by a well-known typeset designer against the principal owner of a typeset company. For years the company has used both men's names in its well-known business title. It licenses the rights to certain fonts to users throughout the world. The lawsuit claims that in 2004 the parties orally agreed that plaintiff would become an equal partner. In return, the plaintiff allegedly gave the company some of his fonts with a royalty value of $3 million for $10.

Plaintiff claims that the owner ultimately is liable for his breach of contract in failing to make plaintiff an equal partner. The plaintiff also points to a prepared press release that the owner's wife commissioned that announces the formation of a partnership between the two. The suit claims $20 million in damages for breach of contract.

The defendant retorted that the plaintiff is a long-time "employee" who has misrepresented the facts. The company says it was simply using the name for business reasons and that it would revert back to its original name. However, in California and other jurisdictions, the law and the facts now available would point to a substantial claim by the plaintiff in these contract disputes. The course of the dealings of the men and the surrounding circumstances, including the turning over of a famous and lucrative typeset license for $10, indicates that the plaintiff's claim is more substantial than the defendant apparently wants to admit.

Source: theverge.com, Hoefler and Frere-Jones set for $20 million court battle over share in iconic type foundry, Aaron Souppouris, Jan. 17, 2014

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