Breach of Contract. Verbal Agreement.
Is a verbal agreement a binding contract? Absolutely. Oral agreements are enforceable, so be careful what you say. While it does depend on the jurisdiction (each state has different contract rules), most jurisdictions recognize oral agreements as being enforceable.
Friends star Lisa Kudrow discovered this the hard way. In 2007, Kudrow’s former manager Scott Howard sued her for breach of contract. An interesting fact is that it was the breach of an oral contract. The challenge with oral agreements is you must first somehow prove that an agreement between the parties actually existed. While difficult, it is not impossible. It can sometimes be determined by emails, purchase invoices, memos, and other written documentation.
In the case of Lisa Kudrow, it was relatively easy to prove a contract existed, since Howard had represented for her for 16 years. He claimed she owed him money even after she fired him. The average layperson might ask, “Why would she owe him money when he was no longer working for her?” Contract law and industry standards provide that if someone gets you a deal, and you continue to receive residuals and royalties from that deal, then the person who got you the deal deserves to be paid.
What can YOU learn from her experience regarding contracts?
- Know that oral agreements are enforceable
- Get everything in writing so YOU control the terms (otherwise the court will do it for you)
- Understand what’s in the agreements you sign
- Don’t try to cheat someone out of what they honestly have earned