Verbal Contracts and Texas Law
Verbal Contracts do exist and are legally enforceable in Texas, as a matter of law, if they meet necessary legal requirements and specificity. Adequate consideration must be given between the two parties of a verbal contract to make it binding. Adequate consideration is defined in two ways: (1) having a mutual reciprocal exchange [bargained for exchange] or (2) having legal value [an individual must do something that he is not legally obligated to do]. If adequate consideration is given between both parties and all other legal requirements are met, then a verbal contract may be held valid in a court of law.
Verbal contracts are also limited by the Statute of Frauds. The Statute of Frauds requires certain types of contracts to only be in writing purportedly to avoid defrauding citizens.
The following must be in writing:
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(1) Making a will or Trust
(2) A contract to answer for the duty of another (Guarantee/Suretyship)
(3) Marriage (exception common law marriage)
(4) Sale and contracts affecting Land
(5) A contract that lasts longer than 1 year from the time it is made and which cannot be performed in one year
(6) Any sale of goods for a price of $500 or more
(7) Sales of securities
Verbal contracts in Texas have limitations. Let’s say that a contractor wanted to paint the outside of your house. You decide to pay the contractor seven thousand to paint the outside of the house and the job will take approximately 3-8 weeks. If you have a verbal contract with the painter and pay him this could be legally enforceable in a court of law. The verbal contract with the painter is not invalidated by any provision set above in the Statute of fraud. It is a contract for service, under one year, and adequate consideration has been given with the payment of seven thousand dollars.
Here is another example of a verbal contract that will not be upheld in a court of law. An individual buys fifty acres from his neighbor for fifty thousand dollars under a verbal contract. Before the fifty thousand dollars is exchanged, the neighbor decides to pull out of the deal. This verbal contract would not be enforceable in court and the buyer cannot enforce the contract because it deals with real estate (land). This is one of the specific types of contracts that must be in writing because of the Statute of Frauds. The individual may get his money back but the point is he cannot enforce the contract since it is not in writing.
The best course of action in the litigious world we live in is to cover your tracks by securing a written contract in almost all circumstances. Do not rely on the limited options that allow a verbal contract to be enforced because in court you will have to deal with the “He said, she said” testimony and incur significant cost of litigation unnecessarily.
Holding an Inspector Accountable When Purchasing a Home
The housing market has exploded in the Dallas / Ft. Worth area in the last several years through the move of many companies to relocation national/regional headquarters to Texas. New jobs have created an explosion in the DFW housing market bringing in many potential buyers. A nice home in a good neighborhood may last only a couple of days before it is sold.
Potential buyers must be prepared when purchasing a home in the Lone Star State. After the initial offer, it is customary to have 8-12 days for a potential buyer to have the prospective home inspected by an independent third party. During this time, it is important to find an inspector that you trust.
If the home inspector performs a negligent inspection or misrepresents the condition of a part or a defect in the home that causes expensive problems for the buyer, the inspector may be liable. The Texas Deceptive Trade Practices Act (DTPA) will protect a buyer from the misrepresentation of an independent inspector. Under the DTPA per Tex. Bus. & Comm. Code §§ 17.46(b) there are multiple causes of action to insure your protection if an inspector committed an action that:
(a) represented that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
(b) causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
(c) causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another;
(e) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not;
(f) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
(g) knowingly making false or misleading statements of fact about the need for parts, replacements, or repair service;
(h) falsely representing that work or services have been performed on or parts replaced in goods; and
(i) failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed;
These are some of the causes of actions that can be filed against a home inspector that misrepresented a portion of the home that had a severe defect. DTPA actions can be complex and intricate both in filling the action and in litigation of the case. An experienced real estate attorney is needed if you wish to pursue a remedy.
Julian Nacol, Attorney
Nacol Law Firm P.C.
Your Trust Fiduciary/Trustee—-Friend or Foe??
With the financial conflicts facing individuals and families today and the aging of the general population, more trust beneficiaries and family members are becoming concerned with the fiduciary duties of the trustees of their individual trusts.
The fiduciary duty is a legal relationship, obligation and trust to act in the best interest of the beneficiary. The fiduciary or trustee, must employ undivided loyalty to the beneficiaries concerning all matters related to their trust and will be held accountable if he or she acts adverse or contrary to the interest of this relationship.
The duties of a Trustee Fiduciary include the following:
- The Trustee must be loyal to and administer the trust solely for the benefit of the beneficiaries. The trustee can never take advantage of his or her position for personal gain.
- The Trustee must deal impartially with all beneficiaries, if more than one exists. This can sometimes be difficult, since each beneficiary may have their own agenda and needs to be met.
- The Trustee must obtain possession of the trust assets immediately and keep these assets under his or her control through the entire term of the trust. The Trustee must also enforce claims and defend actions against the assets in the trust.
- The Trustee must keep the trust assets separate and segregated from his or her own personal assets and from assets or funds of any other trust instrument unless the trust itself provides otherwise.
- The Trustee must administer the trust personally and responsibly at all times and only delegate responsibilities that would be in the best interest of the trust, such as a tax advisor or accountant.
- The Trustee must keep the assets productive to pay income to the beneficiaries. The duty of the trustee is to keep trust property invested so it produces income.
- The Trustee must make full disclosures and furnish information to the beneficiaries about the administration and status of the trust. An annual report is standard with an accounting of income, expenses, gains, and losses. Upon request, the Trustee must provide for the beneficiary, complete and accurate information on the nature and amount of the trust property and permit the beneficiary to inspect the accounts and other documents related to the trust.
A Trustee must be honest, responsible, have a high degree of integrity, and a genuine interest in the welfare of the trust and the beneficiaries. It is also very important that the Fiduciary has experience in the investment of assets and management of property to keep the trust income producing.
There can never be a conflict of interest between a Trustee and the beneficiary. The law forbids a Trustee from acting in an adverse manner contrary to the interest of the beneficiary or from acting in his own benefit in relation to the trust.
The Nacol Law Firm PC
Law office of Attorney Mark Nacol
Serving clients in the Dallas – Fort Worth Metroplex area for over 30 years
Tel: 972-690-3333
Contract Killers : Arbitration and Selected Forum Provision
Contracts are the concrete pillars of our capitalistic society and govern all transactions promoting trust and stability within our American culture. An individual that enters a complex contract regarding a commercial lease, any professional services, or business and franchise agreements must be aware of two killer provisions that may be game changers if the need for litigation arises.
First, any individual prior to entering a binding contract must first read the contract thoroughly to see if there is an arbitration provision. An arbitration provision has the power to tie the hands of any contracting party. An arbitration provision forces a contracting party into a tribunal of selected arbitrators thus precluding a contracted party from obtaining their day in Court. These provisions must be carefully considered and examined before an individual signs a contracted agreement. This is a non-extensive list of potential problems an arbitration provision may cause:
- Location, Location, Location. An arbitration provision may dictate the location of the arbitration process;
- Attorney’s fees. An arbitration provision may dictate who pays for the attorney’s fees during the arbitration process;
- Selection of arbitrators. An arbitration provision may dictate the selection process used to determine the tribunal of arbitrators which will hear the case;
- Arbitration Provisions are favored by Texas and the Supreme Court and it is difficult to invalidate an arbitration provision.
Second, any individual prior to entering a binding contract must next read the contract thoroughly and determine if a Selected-Forum provision exists. A Selected-Forum provision may dictate (1) the choice of law that will be used while interpreting the contact and (2) the venue or jurisdiction that will apply. Texas favors Selected-Forum provisions and these provisions are difficult to invalidate. This is a non-extensive list of potential problems with Forum-Selection clauses:
- Location, Location, Location. A Forum-Selection clause may force the contracted parties to bring a suit in another state other than the state the contract was signed in;
- Choice of Law. The Selected-Forum Clause may force the contracted parties to utilize another State’s law;
- The Selected-Forum Clause may also include torts. If the Selected-Forum Clause is specific enough it may encompass torts (fraud, negligent misrepresentation, tortious interference with contract) and preclude a party from bringing a tort dispute in a State to which one of the parties reside;
- Selected-Forum clauses are favored by Texas and are difficult to invalidate.
Be wary of arbitration provisions and Selected-Forum clauses. They both may be deal breakers for certain businesses. If you have signed a contract with these provisions there may be remedies but you must consult an experienced attorney.
Julian Nacol, Attorney at Law
Nacol Law Firm P.C.
(972) 690-3333
Business Contracts : A Perspective for an Employer
The best employment law defense counsel takes every aspect of a case into account, but most importantly the impact a lawsuit may have on the reputation and finances of the Company. Employers must be aware of state and federal laws that govern employee hiring, compensation and treatment. Federal and State employment laws concerning wages and overtime are complex and impose significant responsibility on the employer.
Other things an employer should consider are:
- Anti-discrimination laws
- sexual discrimination
- age discrimination
- disability discrimination
- race discrimination
- Hiring practices (contracts)
- Compensation (wages, bonuses, paid leave, vacation pay, benefits, severance packages)
- Family and Medical Leave
- Termination
- Immigration matters
- Sexual harassment
- Intellectual property rights
Employers should also be cognizant of employees that are allowed access to intellectual property information created or developed for the Company by employees in the course of their employment.
There are a number of questions to be addressed by the Employer both at the time of hiring personnel and at regular intervals throughout the course of their employment, such as:
·The scope of the employees duties, and how those are to be documented;
·Their level of seniority;
·Whether their duties involve a requirement that they invent (or contribute to inventions);
·The employee’s propensity to invent;
·The access which the employee has to the employer’s resources (both during and after hours) for their own purposes.
·Proprietary Information Agreements
·Non-competition Agreements, where indicated
On the basis of recent decisions of the Federal Court, only very brave employers are likely to decide that they do not require employment agreements with their senior employees or with those employees privy to confidential or proprietary information.
If you are an employer facing legal issues in any aspect of employment or intellectual property rights, consult Mark A. Nacol of The Nacol Law Firm for guidance.
The Nacol Law Firm PC Law office of Attorney Mark Nacol
Serving clients in the Dallas – Fort Worth Metroplex area for over 30 years
Tel: 972-690-3333
NACOL LAW FIRM P.C.
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Suite 1190
Dallas, Texas 75231
972-690-3333
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization
