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Comment by apgwoz | Hacker News Reader

IANAL: I seem to recall that an oral contract is just as valid as a written contract, but obviously an oral agreement suffers from selective memory--hence written contracts. If these documents provide some insight as to a) the fact that there was an oral contract and b) some of the terms of the contract, c) deemed admissible in court, then is the fact that they had no written contract actually a problem?

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In the USA an oral contract is only binding up to some amount of money (something large, over a million IIRC), and I think this deal was bigger so it actually isn't legally binding. Not to say it's a good idea :-)

I had never heard of that, so I looked it up and found this: http://en.wikipedia.org/wiki/Contract#Formalities_and_writin... and this http://en.wikipedia.org/wiki/Statute_of_frauds

If I'm reading it correctly, many jurisdictions require contracts to be written when they exceed certain amounts of money. In the US that amount is $5000.

A statute of frauds defense may also be effected by a showing of part performance, upon showing of one of two different conditions. If the parties have taken action in reliance on the agreement, as in the case Riley v. Capital Airlines, Inc. the court held that part performance does not take an executory portion of contract out of the Statute of Frauds. Each performance constitutes a contract that falls outside the Statute of Frauds and was enforceable to the extent it is executed. But the unexecuted portion of the contract falls within the Statute of Frauds and is unenforceable. As a result, only the executed portion of the contract can be recovered, and the doctrine of part performance does not remove the contract from the statute. On the other hand, the court in Schwedes v. Romain held that partial performance and grounds for estoppel can make the contract effective.

If I am reading that right: Because they used TC office space it is implied that a contract existed and Statute of frauds does not apply to that part.

In the USA an oral contract is only binding up to some amount of money (something large, over a million IIRC)

You're thinking of the statute of frauds, and it kicks in at $5000. But there are exceptions.

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