Carthage, TX asked in Business Law for Texas

Q: Can I sue a person (not their LLC) for breach of contract based on an oral agreement to start a business with them?

Had an oral agreement to start a restaurant and split profits. Worked to get the building ready and I purchased all needed cooking equipment ~$4,000. My duties besides providing 95%+ of capital were advertising & marketing, especially online: Website, Facebook, etc. I performed and still am performing all of my duties, but my partner filed for an LLC in just his name and says I am not a co-owner of the restaurant. He did reimburse me for the equipment I purchased, but our agreement was to form a partnership and he still owes me a considerable amount of money for work and services, besides my share of the profits from Aug. 2012. I haven't seen any of the bookkeeping, but I did see a paper showing total cash intake before outgoing for March of 2013 of $43,000 for that month.

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1 Lawyer Answer
Edward J. Kazaleh
Edward J. Kazaleh
Answered
  • Houston, TX
  • Licensed in Texas

A: I do a lot of small business law as well as restaurants. Honestly, the biggest problem I've seen is the inevitable disputes among owners of start-ups. In this situation, you are a little behind as most of this should have been resolved in a written agreement from the start and with an Attorney involved. It would have cost just a few hundred Dollars investing in bringing an Attorney on to do the LLC entity set-up and filing and that alone would have given you a much stronger claim for participation.

As it is now, it all really depends on how much evidence you have to prove that it was intended as a partnership with you, and not, just you helping to fund his/her business. Proving that may involve going to Court or threatening to do so, but I don't think your opponent is going to give you much regard UNLESS you are represented by an Attorney.

Generally, verbal agreements can be enforced as contracts, but there are many problems with getting that done and proved. It seems like it would be a good idea for you to sit down with an Attorney and bring your evidence. We can provide a No Fee No Obligation consultation if you would like to set one up, E-mail me: legalhelp@live.com

or go through our WEBSITE: www.BIZLAW.PRO I work 7 days a week and can meet evenings or weekends.

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