Let me see if I can simplify this. Sorry for the length, after reading your posts I think it's warranted.
Imagine you're really good and getting people to rent houses. So you propose a deal with a property management company that you make 10% of the rent in perpetuity for every renter you bring them.
So in January you bring them Jack and Jill and they rent the house on Main street for $1,000/month.
Also in January you bring them Sam and Sally and they rent the house on Johnson street for $1,000/month.
At the end of the year 1 they have collected $24,000 in rent and they pay you a commission of $2,400.
If both couples stay on through year 2 and the rent stays the same, you get another $2,400 and this continues every year until they move out.
For the last 11 years you've been working your sales magic and they've been collecting the rent and paying you your commissions.
But in June of 2021 they said something nasty about you to one of the renters and so you stop sending them new renters. At the end of 2021, they send you a check (for all of 2021) and tell you your agreement is over. You complain, they say you cashed the check so you must have agreed, and the argument continues.
Now, the problem is this, you can't find a signed contract and don't remember whether one was signed. In the beginning, you sent them an email describing the agreement you wanted in detail and they sent you a rough draft describing it in their own terms. The idea was to put together a contract but as neither party can find it nobody believes it exists. However, you do have in electronic form the original email and their response.
Somewhere during those first days they verbally changed the deal so that they pay you a fixed fee of $100 instead of 10% and we both verbally agreed to it. This isn't written anywhere that you can find.
They are now saying:
- You broke the agreement in June when you stopped referring new renters to them. Note -- there was nothing in any agreement that said you couldn't refer to other property management companies.
- The rents were never supposed to be in perpetuity even though that's exactly how you described the agreement in the initial email and exactly how they've been paying you for 11 years.
- As you don't have a signed contract (or it can't be found) this is a verbal agreement and as it cannot be completed in one year it has to be renewed each year and is thus now void.
My thoughts:
As the agreement was written out in emails and with the evidence of their payments to me according to those terms (though a slightly different fee), this seems like an oral agreement backed up by written proof and actions.
The first paragraph on the following page "seems" to support this:
Oral contracts - Colorado - Stutheit & Gartland P.C.
It does go on though to say the following:
The Colorado "statute of frauds" does require that certain contracts be in writing. Section 38-10-112 of the Colorado Revised Statutes says the following are void agreements, if not written:
(a) Every agreement that by the terms is not to be performed within one year after the making thereof;
That's what's royally confusing me. Is the oral contract voided by the fact that this agreement extends beyond one year?
Lastly, as to where I found the info that the courts can overrule this -- it's from the bottom of that same page where it says:
However, Colorado courts have the authority to enforce an oral contract, despite the statute of frauds, in cases of part performance of such agreement. The part performance must be substantial, not minimal. The theory behind this is that a party to an agreement should not be able to use of the statute of frauds as an instrument or shield for fraud against the party who performs the contract, whether or not it is oral.
I've done a lot of reading on the subject but I'm not an attorney and I can't figure out whether the one-year issue voids everything or even whether the proof of our oral agreement is enough to make it valid. It's frustrating as I've done all the work in getting them their clients and even spend time convincing the clients not move to other companies each year but now I no longer get commissions. I can tell my clients to move to another company but that's a pain for them (and me!).
Thoughts?
