I wrote out a personal check to a friend for him to start an LLC. The check was made payable to him. We had a verbal agreement on the amount that I gave him and there were not any papers signed as far as this matter was concerned. He has storage expenses he is paying on his merchandise and he asked me to help him out financially.
First, you have no obligation to help him out financially. The fact that you wrote a check to him personally does not obligate you to do anything further. The check you wrote could be considered a gift or a loan, but without any contract agreement, the check is likely just a gift. If you wanted the check to be considered a loan, then you should have drafted a simple contract stating that you wanted the check classified as such.
Second, a verbal agreement is a binding contract. However, a verbal agreement simply stating an amount with no other terms is not a contract. Without getting too technical, you need two elements to form a contract - (1) mutual assent and (2) consideration. With the limited facts you supplied, it seems you do not have a binding contract because there is no consideration, and potentially no mutual assent. You simply gave your friend some money, and it is likely classified as a gift. Also, verbal contracts can be difficult to prove in court, unless you have some emails, text messages, or other writings that can prove the existence of an oral agreement.
Finally, because of the limited facts referenced, I recommend consulting with an experienced contract attorney. An experienced attorney can likely steer you in the right direction if you are able to provide him/her with more facts about your case.
Good luck! I hope this helps.
You have not stated whether the check you wrote was a loan or otherwise. Whether a loan or a gift on what basis would you be obligated to give your friend additional funds?
If you lent or gave him money, there is no obligation to give him more - even if you promised an additional gift you can revoke it. If you invested in his business, then it is a mess without a contract and could end up in court. If you are his partner in the enterprise he can argue that you split expenses.
This should not be considered legal advice and is intended for educational purposes only. It does not constitute a contract for legal services between any parties. Answers are given to questions for which there may be additional facts not mentioned which might change the legal issues or consequences.
Time to stop giving him money. If this was a loan, get something in writing. Unless this is a partnership or joint venture, no, you would not be liable for his expenses.
Our Rating is calculated using information the lawyer has included on their profile in addition to the information we collect from state bar associations and other organizations that license legal professionals. Attorneys who claim their profiles and provide Avvo with more information tend to have a higher rating than those who do not.What determines Avvo Rating?Experience & background
Years licensed, work experience, educationLegal community recognition
Peer endorsements, associations, awardsLegal thought leadership
Publications, speaking engagementsDiscipline