Legal Eaze #95 Collecting From Defendant/Single Spouse Bankruptcy/Oral Contracts

Title: August 6, 2008

Q: I sued someone in Small Claims Court and I won. The Defendant appealed and lost the appeal. When can I start collecting from the Defendant?

A: Now seems to be a good time.

Q: Can only one spouse file for Bankruptcy?

A: It is not required that both spouses file for Bankruptcy. Only the filing spouse will be discharged of any debts. You must also realize that the non-filing spouse’s income will be considered in any tests of “income vs. expenses”.

Q. Is a verbal agreement on a $30,000 boat enforceable?

A. The law refers to unwritten agreements as “oral” contracts, not “verbal”. There are several limitations on the enforceability of oral contracts. One of them is the “Statute of Frauds” which is actually a set of statutes. One part of the Statute of Frauds package is found in the Uniform Commercial Code and covers the sale of goods by oral contract. Section 2201 of the Commercial Code states as follows: “Except as otherwise provided in this section, a contract for sale of goods for more than $500 is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his or her agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in the writing”. Other paragraphs to UCC Section 2301 that make modifications and exceptions to the basic principle and there are other applicable laws, such as in the Harbors and Navigation Code. An important exception is that if the other party admits in a Court pleading that the contract exists, he is bound by it as though he signed it. Another problem with oral contracts is that it is difficult to prove the terms of such contract in Court. The defendant may argue that he had a different “boat” in mind, or a different price or payment terms, etc. Generally speaking, I would say that the agreement cannot be enforced unless there is an exception to the Statute of Frauds that covers it, and it is possible that there is such an exception.

Maxine de Villefranche has been an attorney for 15 years and is practicing law in Tehachapi and Lancaster. Send your questions via fax at (661)825-8880 or e-mail at maxinedev@msn.com. She will answer your questions to the best of her abilities.