Question: I sold a musical instrument to a friend of the family for $1,100, to be repaid at $100.00 per week for 11 weeks. It has now been 48 weeks since I received any kind of payment. He has told me numerous times when the “next payment” would be made, but never follows through. He’s now claiming that a verbal contract isn’t binding. Is he right about that?

Thank you,

Paul

Answer: Wow, what a jerk! The friend, I mean. Maybe former friend? Whenever I hear a scenario like this, the old bit of wisdom about how “just because we can do something doesn’t mean we should” comes to mind. Even if he’s right, is this the kind of person you want to be? Using loopholes and crossed fingers behind your back to screw over friends?
The bad news is that he’s a little bit right. As I’ve written before, in many cases, a verbal contract is just as legally enforceable as a written contract would have been. As long as there is a clear offer, an acceptance of that offer, and a mutual exchange of benefits, a contract usually exists. But not always.

Certain contracts really do have to be in writing. These involve situations where the obligation being undertaken by one of the parties is so substantial that courts and legislatures have concluded that putting some added precautions into place to minimize the chance of fraud makes sense. Among those are contracts for the sale of land, or contracts that will take more than a year to perform. More relevant to your situation are contracts for the sale of good worth more than $500.

Equitable relief to the rescue

But wait! Don’t give up hope just yet. Fortunately, we don’t live in a society where you can take something from someone with promises to pay later, and then laugh in his face when the bill comes due and ask to see the contract, which you know doesn’t exist. Even if there is no contract, you may be able to ask a court for “equitable relief” in exchange for the instrument.

What is equitable relief? As its name indicates, equitable relief is about what’s fair. Maybe there are no easily identifiable, objective damages here, but clearly, something unfair has happened that calls for some sort of remedy. While it sounds as though you probably don’t have a contract in this situation, you have a pretty solid basis for claiming that, despite the absence of any written agreement, your “friend” has been unjustly enriched. You’ve provided him with something of substantial value. He’s acknowledged receiving it. It would be unjust to allow him to keep it under these circumstances. That’s a legal claim. No contract required.

There can be other equitable remedies in addition to unjust enrichment that might be helpful to you. Your friend promised to pay you. You relied on his assurances to your detriment. He seems to have confirmed, since the transaction, that there was an agreement in place, with his promises of when the next payment would be made. Although this would probably be much easier if you had a written document in place, the scenario you describe is far from hopeless. Given the relatively small amount at issue, your best next step might be to look into which court would have jurisdiction over this matter (if your friend lives in a different county than you) and find out what it takes to bring a small claims action there.

Best of luck you!

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