What can I do to get a contract in place on the business I own with my brother?

Full question:

Last year (January of 2006) my brother made an oral agreement with me that I would have a 50 percent partnership in the gas station business. Out of the net profits, my share would go towards paying off the business. I even paid him 100,000 dollars towards the cost of the business. A few days back my friend’s family died in a car accident and now I am very worried. What will happen in case my brother dies? How will his wife decide or the kids know what to do? I am very concerned because we don’t have written proof of our agreement.

• Category: Contracts
• Date: 04/07/2025
• State: California

Answer:

While oral contracts can be just as valid and enforceable as written contracts, the law requires that certain contracts must be in writing in order to be enforceable by a Court. The state statutes that require certain contracts to be in writing are called statutes of fraud. Statutes of fraud require that either the contract itself be in writing and signed by both parties
or there must be a sufficient memorandum of the agreement signed by the party being sued for breach of contract. This does not necessarily have to be a formal contract signed by both parties. It can be a letter signed by only one party setting forth the terms of the oral agreement. However, the writing, whether it be a letter or memorandum, must be signed by the person "to be charged." This means it must be signed by the person against whom you are seeking to enforce the contract. The writing must contain all of the material terms of the contract.

It would appear that the best course of action at this point would be for your brother and you to prepare a memorandum (signed by both of you) and dated as of the date of your signatures, describing in detail the agreements you have made orally over the years regarding this business.