Legal Question in Business Law in Rhode Island

Unsigned Contract for $2500 - is it enforceable as a Verbal Contract?

In January 2002, I put down a $2500 as deposit to hold an event at a function hall in Rhode Island for November 2002. Unfortunately, the event had to be cancelled, and the hall was notified in July 2002.

The Hall had a contract which we were supposed to sign, but they kept revising it and therefore it was never signed. (The contract stated that the deposit was non-refundable).

Since, the contract was never signed by any party, is the function hall required to return the deposit? They claim that once a deposit check is paid to them that this constitues a verbal contract. They also claim that they tried to rebook the function date and were unsuccessful and that they put in many hours working on the function and that is why they have the policy of non-refundability.

So, question: Does the State of Rhode Island require that a contract with a value over a certain amount be signed? Or, is, as the Hall claims, a verbal contract is valid? (The cost of the function would of been tens of thousands if it was held and the deposit was $2,500)


Asked on 3/07/03, 3:49 pm

1 Answer from Attorneys
Jules D'Alessandro D'Alessandro & Wright

Re: Unsigned Contract for $2500 - is it enforceable as a Verbal Contract?

Verbal contracts are enforceable in the State of Rhode Island. However, based upon the facts that you have given the parties manifested a definite intent to reduce this contract to writing. Therefore without a writing there is no contract, and certainly no contractual agreement that the deposit was non-refundable. This is the legal answer.

Under the rules of "equity" the hall will be able to keep some or all of the deposit if they can prove that they suffered irreparable harm by the cancellation (in excess of $2,500.00) and that they made all reasonable efforts to re-rent the hall. It seems to me that there was more than ample time to re-rent the hall and that this matter may be worth looking into. Please feel free to contact me to dicuss this matter.

Jules J. D'Alessandro

D'Alessandro Law Associates, Inc.

1515 Smith Street

North Providence, RI 02911

Tel:(401)353-0440

Fax:(401)353-0344

E-Mail: [email protected]

Web: www.dlawinc.com

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Answered on 3/07/03, 5:00 pm


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