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Is my verbal agreement in affect?

San Jose, CA |
Filed under: Small claims court

I loaned a friend $ 6000 . 00 back in 1999 and was supposed to pay me back in 6 months . He signed an IOU for the money and ran into some very rough times . 3 years ago he verbally told me that he would pay me my money after his mother passed away and he sold the house . I have a witness to that statement . The house just sold 2 months ago and he refuses to pay me . Since we made a verbal agreement that he would pay me after the house sells and he now has the money wouldn't the clock start ticking 2 months ago on the statue of limitations for a verbal agreement . I want to take him to small claims court but I need to know if I have a valid statue of limitations or am I wasting my time ?

I know the statue of limitations is up on the written one,but I really need to know if the statue of limitations just started 2 months ago with the verbal agreement. I know that the statue of limitations on a verbal is 2 years. Do I have a case on that verbal agreement as far as statue of limitations?

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Attorney answers 5


I think you have a decent shot at recovering in small claims court. The statute of limitations is a defense, and can be waived if the defendant debtor does not raise the defense. You have the burden of proving the exact terms of the verbal agreement. Here it appears your theory is that the verbal agreement replaced the original written IOU.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.

David B Pittman

David B Pittman


Great answer!


I agree with Mr. Chen. It would be worth a shot to file the small claims action. If they do not appear or do not raise the SOL defense, you may get a judgment based on the verbal agreement. You must do a demand letter first, so you can try that. Good luck.

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I agree with Attorney Chen. I recall this question was also asked and answered recently? You have the burden of proof and will need to set out your facts and any proof that the loan was made and that there was an IOU and that you didn't sue earlier as the defendant is a friend and continued to promise to pay when they had the money and they did not have the money until the house sold two months ago, so if they raise the Statute of Limitations, I would argue that the repayment of the debt is per the new agreement made three years ago not the old agreement 6 years ago and per the new agreement, the obligation did not commence until 2 months ago when the house was sold. Make sure your witness is there or you at least have a declaration under penalty of perjury from them.

Legal disclaimer:This message does not constitute legal advice and does not create an attorney-client relationship. Any statements are made for general informational purposes and do not constitute legal advice. No attorney-client privilege is created by this communication. Attorney is licensed in California only.


I believe the statute of limitations has been extended by the fact that you have renegotiated the damages and you have given the borrower consideration in that you have extended the due date for the loan period especially in light of the fact you have a witness. I would move forward quickly and file your action in small claims court.

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In my mind, I would like to know what the written IOU said as to when payment was to be made. It appears he was to pay 6k sometime in '99 or early 2000. Then there was the IOU. Im concerned that the IOU reqd payment sometime before 2009 when there was another verbal agreemnt made. I think that if the 4yr sol expired before he made the verbal promise in '09, you may lose. It doesnt appear there is consideration given by you in exchange for his later verbal agreemnt to pay. By that I mean, if you agreed to give him 50.00 and he agreed to pay the old expired loan, then you gave consideration. Consideration doesnt have to be money.

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