QUESTION
Is a verbal side agreement to a signed LLC operating agreement enforceable in New York?
Asked on Nov 08th, 2016 on Business Litigation - New York
More details to this question:
The side agreement was negotiated in the presence of 7 people. There's a clear record of the agreement in emails and scheduled conference calls. A draft was written but not signed. One party delivered on their obligation (plaintiff) within several months, the other didn't (the defendant). According to the side agreement defendant now owes a substantial amount of money to plaintiff. Plaintiff's defense is that the side agreement was never signed. Some of the witnesses would testify as to the validity of the agreement. This relates to an LLC partnership in a business. Operating agreement was signed.
1 ANSWER
1 Award
It is not a definite loser but it is an uphill climb. First, if the operating agreement provides that any amendment must be in writing, and the side agreement relates to it, that may be a fatal fact. Second, although an oral agreement is enforced, the presence of a draft looks like that it was intended to be reduced to writing, which means the oral part is not enforceable. Obviously if you do nothing you get nothing, so maybe there is enough here to get a settlement.
Answered on Nov 12th, 2016 at 12:44 PM