Legal Question in Business Law in Arizona

Re: Verbal agreement to close a loan

More facts need to be known. Does your purchase agreement (which I presume was in writing) provide that any modifications to the agreement must be in writing? If it does, you may have a problem if you attempted to modify its terms with an oral agreement. I wish you would have received a written approval from your seller.

That being said, there is a principal in the law which provides that if there is an oral agreement, and one party relies justifiably upon it and performs, or partially performs, that takes it out of the statute of frauds arena. So you may have some grounds, especially if the seller has admitted his agreement. However, I am puzzled as to what other terms you had to work out. If they were material terms, and were not yet agreed upon, you had no agreement.

Suggestion: Depending upon the time frame for your payments, try to convince your friend that it is to his advantage to accept the funds now, at a slight discount. Money has a time value, and he can invest the funds, earning gain on the entire lump sum, not just the monthly payments. If he has debt, he could retire it. I would probably always take $171K now rather than $190K later. I could buy a house,(they appreciated 40% last year in Arizona in many parts), start a business, invest, and have many other opportunities with my cash. I am not sure what he is thinking. Also, remember that a bird in the hand is worthy of consideration by him.

Good luck,

James D. Jenkins

Re: Verbal agreement to close a loan

An agreement to agree is not enforceable. By your own statement, you set an appointment to work out the details of the agreement, which suggests that you only had an agreement to agree and not an agreement with sufficient offer, acceptance and consideration to make a contract. Even so, the statute of frauds requires agreements involving large sums of money to be in writing. More important, how have you really been injured or damaged? It sounds like you asked him if he would accept less money for payment now, and he said yes, but you did not know if you could raise the money and before you could make a firm offer, he changed his mind. Further, he could just say that he never made an agreement, only said he would consider the possibility. It is also common practice that if you are going to modify an agreement in writing (your purchase agreement and payment terms) that any modification must be in writing. All of the above makes your attempt to enforce the discount, rather doubtfull.