Oral Contract Enforced

 In Real Estate
1. Contract Will Be Enforced if it is Sufficiently Definite for the Court to Determine Each Parties’ Obligation.

Yuri and Tony are Russians who are involved in a number of companies in the business of oil exploration in Russia. Yuri talks Elliot Broidy into investing in one of his companies. Elliot gives Yuri $750,000 with a written agreement that the investment would only go to efforts regarding oil exploration. Plaintiff, Farmers & Merchants Trust Company, is the trustee of Broidy’s pension. Broidy learns that his $750,000 investment went to pay for Yuri and Tony’s pre-existing debts.

Broidy and Tony orally agreed that Tony will pay back the $750,000. Tony fails to pay back the money, and F&M Trust sues Tony on the breach of oral contract. Tony argues at trial that F&M Trust should not be allowed to amend the complaint to allege a breach of oral contract, as the alleged terms of the oral contract were not final or definite, and therefore could not be enforced.

The Court of Appeal affirms the decision of the trial court, allowing for the enforcement of the oral contract. The Court of Appeal stated that the terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach, and for giving an appropriate remedy. The court believed that apparently Tony promised to pay back Broidy $750,000. Tony argued that the parties intended that they would have their attorneys prepare a written contract for repayment of the money, and therefore that there was no oral agreement to enforce. The court found nothing in the record that supported the inference that Broidy and Tony did not intend their oral contract to be binding until a formal writing was executed. See, Farmers & Merchants Trust v. Vanetik, 4DCA/3, No. G053688. March 27, 2019.

About the Author

  • Scott Souders
    Scott Souders Attorney & Author


Scott Souders is a real estate attorney who has practiced real estate law in excess of 42 years in Southern California. The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.

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