What to do about an oral contract that is not being honored?

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What to do about an oral contract that is not being honored?

My daughter had braces put on 3-4 years ago and at the time they were placed I made a verbal agreement with the owner of the practice to pay $25 per month to pay for the treatment. Since then he has retired and the doctor that took over the practice is insisting that I pay $75 per month. I told her that since I am a single parent and I am on disability I could only afford to pay the $25 but she is insisting now she is billing me for the $75. It is showing a late charge of $50 since I am still paying only $25. I have never missed a payment and pay religiously (and more if I can). What can I do? At this rate with the the late fee I will never get this paid off.

Asked on March 28, 2012 under Bankruptcy Law, Massachusetts

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As a general matter, an oral agreement is enforceable, and in principal, the new doctor should be bound by it: when she bought the practice, she could only acquire those rights the seller had--such as the right to be paid $25/month by you.

However, there are some significant problems for  you:

1) There is something called a "statute of frauds," which is a law that requires that certain agreeements be in writing to be enforceable. In Massachusetts, an agreement which "is not to be performed within one year of its making" must be in writing. It may that a multi-year repayment agreement is not enforceable unless it was in writing.

2) Even if it turns out that the statute of frauds is not an issue in your specific case, it can be very difficult to prove the existence and terms of an oral agreement, if the other party does not agree with your understanding of it (though you could presumably get the old doctor to testify at a trial, if   you are sued).

All in all, it may be that you cannot enforce the oral repayment agreement. You may need to consider other options, such as bankruptcy.


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