Is a verbal purchase agreement binding?

My partners and I had an agreement with a seller to purchase his business for a set price and terms, verbally. Affiliates of the business, such as independent contracts, were also told by the owner and us that we were going to purchase the gym. However, the price and conditions obviously were not disclosed. We had a set date to take over and the writing of the purchase agreement was written; the date was set for the signatures to take place. Is there an AZ verbal agreement law that states the owner has to sell it to us or is he able to back out of our agreement?

Asked on September 17, 2010 under Business Law, Arizona

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Well, yes there is a law that somewhat fits in to what you are stating.  It is known as the Statute of Frauds and it covers certain instances where contracts made have to be done so in writing (such as contracts for the sale of real property).  Depending on the terms of your oral agreement, you may or may not be caught up in this statute.  But while you are going to state that a contract was entered in to and only waiting to be memorialized in writing, he is going to say that negotiations fell through.  Did you give him any money "in consideration" of the purchase yet?  You should really speak with an attorney in your area on this matter.  It is hard to discern how this will pan out here in this type of forum.  Good luck.


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