Is a verbal agreement valid?

I worked part time for a character company in Indianapolis for 2 years and quit last week to start my own company of the same sort, mostly volunteer with my own costumes. I am not using any of their material. They have informed me that I agreed to a verbal contract when I first started with them that I would not portray any character they have or provide any of the services they provide within 200 miles of their business for the next 5 years. I was not aware of this agreement and I have never signed or been presented with any sort of contract for this business. The only people at the meeting where this was apparently agreed upon were me and 2 people from the company. I would like to know if I am legally bound to this agreement?

Asked on February 11, 2016 under Employment Labor Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Generally, an oral agreement (the better term than "verbal") is enforceable, but can be difficult to prove if the two sides disagree on what was agreed or whether there was an agreement. However, courts disfavor non-compete agreements, even though such agreements are enforceable, and will generally not enforce them unless they were in writing. Further, the alleged agreement you describe is longer and covers a wider radius than courts typically encorce. All in all, because it would be difficult to prove the agreement, because it is not a written non-compete, and because of its excessive terms, it is very unlikely to be enforceable against you.


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