How long is a verbal agreement with respect to a personal loan enforceable?

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How long is a verbal agreement with respect to a personal loan enforceable?

My husband lend money to open an investment account to his uncle with the understanding that he will pay him a 10% annual interest until he pays back the full amount. It has been about 4 years and not only he hasn’t pay a dime back, but he doesn’t even answer phone calls. The problem is that my husband wrote an agreement back then but gave him the money before he sign it, and of course, he never came back to sign. The money is a few dozen thousands and we would like to get it back. The uncle is a beneficiary in a Will, therefore we know he can pay. How can we handle this?

Asked on October 28, 2010 under Bankruptcy Law, California

Answers:

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

Answered 10 years ago | Contributor

You need to seek legal help as soon as you can with this matter.  Yes, verbal contracts are enforceable as long as they do not go against a lawknown as the statute of frauds, which says that some agreements have to be in writing.  Here is the other problem: it is called a statute of limitations.  That is the time in which you have to sue someone and it varies depending on the type of action.  You have a verbal contract here and I think that the statute in California is only two years.  You say it has been four.  You need to make sure that you can still sue him so seeking legal help in your area is the best thing.  Good luck.


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