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How binding is an oral agreement?

Customer Question
how binding is an oral agreement?
Submitted: 9 years ago.Category: Family Law
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2/1/2008
Family Lawyer: Attorney & Mediator, Lawyer replied 9 years ago
Attorney & Mediator
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1) What type of agreement is this?

2) Has any of the parties performed their part of the agreement?

3) What state did you enter into this agreement?
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Customer reply replied 9 years ago
The claim is that this was an oral agreement outside of a divorce decree. An agreement to pay monthly installments. My husband is being sued by his exwife. Divorced over 10 years ago. He paid her monthly for a few years (because he said he felt sorry for her), then decreased the amount, then stopped. She is sueing for breech of oral contract and punitive damages. (I thought punitive damages could not be on contract disputes, only torts.) My husband denies this oral contract, of which she says was supposed to be for 14 years. She is currently remarried and some of these payments were made while she was remarried. We live in Montana.
Family Lawyer: Attorney & Mediator, Lawyer replied 9 years ago
Thank you for your response.

I am assuming this was an agreement to pay her spousal support? You did not mention that, so please clarify.

And this agreement was done after the divorce was finalized?

How many years did he pay?

Thanks
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Customer reply replied 9 years ago
I guess that would be it, but I'm not sure. I think it was to distribute his retirement though. his was much larger than hers, but they agreed in the decree to not have rights to each other's retirement accounts. Yes, the agreement was after the divorce was finalized. I think his first payment was a year after the divorce and he paid for at least two years, maybe more.
Family Lawyer: Attorney & Mediator, Lawyer replied 9 years ago
Thank youCustomerfor answering my questions.

This is solely a contracts issue as it is not connected with their divorce.

A verbal agreement is binding if one of the parties has performed in reliance to that agreement. The fact that your husband has been paying her on a monthly basis, continuously for the last two years, does give her grounds to state the existence of a verbal agreement. Her burden of proof would be to prove that she has detrimentally relied on the past two years in receiving these funds and that your husband's performance in paying her ever month is evidence of the agreement. Your husband's burden would be to disprove this, but the fact that he has been making these payments continuously for the past two years, will really make it difficult for him to dispute the existence of the verbal agreement. From his pattern of behavior, a judge can rule that the verbal agreement is valid.

As this agreement was not made through a court order, the provisions for alimony would not apply and so your husband would not be able to state that such payments should now cease because of her remarriage. If it was agreed to be for 14 years, then the judge can order that it continue for the balance period of time, unless your husband can settle this for one large lump some and obtains a satisfaction and accord with the ex. If the ex agrees to the accord and satisfaction and the payment is made, the lawsuit can be dropped.

As to punitive damages. Although she can ask for punitive damages (in order to punish your husband), they are rarely given in a contracts lawsuit as your husband's behavior in avoiding to pay would have to be considered malicious and extreme that the judge would want to "punish him" for not paying. I don't see that happening here.

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Legal Disclaimer: The information given by me is for informational/research use only and you are paying me only for such information. The information contained herewith is not legal advice and by rendering such information there is no formation of an attorney-client relationship. I also do not claim to be licensed to practice in the state where this information is being provided. I strive to provide quality information, but I make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked herein and it’s associated sites. As law is always changing, you are advised to speak with the appropriate legal counsel for accurate information. Thank you.

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Customer reply replied 9 years ago
Reply to LawNinvest's Post: My confusion here is that he says there was no "contract" to pay for 14 years, she says there was. Why would a judge arbitrarily believe her over him? She could have said 5 years, she could have said 25 years, she could have said X monthly for the rest of her life. When he consulted a lawyer two years (I had said one previously) after the divorce, when she begged for monetary help, the lawyer told him he didn't have to legally and that he'd be crazy to do it. My husband felt sorry for her and did it anyway. Is that were he went wrong? If she is unable to prove that the lack of payments from him are detrimental to her, what then? I am amazed that doing something nice can come back and bite someone. What if his memory of the verbal agreement was 5 years? Or 1/3 of the money she's asking for? I know I'm asking alot of questions, but it's frustrating. I had feared that he had set a precedence by making any payments. Turns out nice guys do finish last sometimes, I guess.
Family Lawyer: Attorney & Mediator, Lawyer replied 9 years ago
Thank you for your replyCustomer

There are two issues the judge has to figure out.

1) Was there an agreement? His pattern of behavior by making payments every month for such a period of time, can satisfy that an agreement existed. So that appears to be clear here.

2) Length of the agreement? When there are no specific terms or evidence to demonstrate the length of the agreement, the judge is given the burden to decide what would be a reasonable length of time. This would depend on their particular case at hand. Issues such as a) why was it given in the first, place? b) was there a need? c) Is there still a need?, d) can the obligor continue to pay? ,etc...this will be what the judge will have to decide. Whenever there is an open term in contracts the judge needs to decide what would be reasonable under the circumstances.

3) It is very unfortuante that your husband did not take the advice from his lawyer. He has committed himself by performing on something he had no legal obligations to perform and she being greedy accepted. Now it is up to your husband to persuade the court that what would be reasonable here is to discontinue further payments as this was only done as a favor.

Unfortunately the judge will be the to decide.

Please accept my answer for the work I have provided you and to close this window. Thank you for using Just Answer.

Legal Disclaimer: The information given by me is for informational/research use only and you are paying me only for such information. The information contained herewith is not legal advice and by rendering such information there is no formation of an attorney-client relationship. I also do not claim to be licensed to practice in the state where this information is being provided. I strive to provide quality information, but I make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked herein and it’s associated sites. As law is always changing, you are advised to speak with the appropriate legal counsel for accurate information. Thank you.

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