Is a verbal Partnership agreement for a startup binding in california?

Asked about 4 years ago - Oceanside, CA

I have a verbal partnership agreement with someone on a startup company. I suspect this person is thinking of taking his part of the business into a partnership with someone else. I have invested a good deal of money and time into the business. He has been pushing for a Written agreement which I supplied, Now he doesent want to sign it. Do I have any recourse?

Attorney answers (2)

  1. Kevin James Griffith

    Contributor Level 10

    Answered . You can have a verbal partnership agreement; it is a general partnership and it is governed by portions of the California Corporations Code. You may have some recourse, but it will be limited due to the fact that there is no written agreement spelling out your duties and obligations. Without knowing more of the facts, it is difficult to say what your recourse would be.

  2. Dana Howard Shultz

    Contributor Level 20

    Answered . Many oral agreements are enforceable (please see the first link below), including those by which a general partnership is formed.

    Each partner has a fiduciary duty to the other partner(s) and the partnership. This includes a duty of loyalty, a duty of care, and an obligation of good faith and fair dealing (please see the second link below).

    Your partner can dissolve the partnership (please see the third link below). However, that does *not* mean that he can unilaterally walk away with half of the partnership property. You should retain an experienced business attorney to help you and your partner work the situation out in a mutually satisfactory manner.

    Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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