Corporate Law Verbal partnership agreement

[MJSimms]

My wife worked for (managed) a small icecream store for 7 years while in school. After graduation with BS she obtained an office job. The owner of the store (after having a rough season without her) offered her 1/2 of the business and outlined the terms in a prommisary agreement. She was going through a divorce and said that they could not sign the agreement while the divorce was pending but would honor it and operate as if it was signed untill the matter was resolved. Trusting her, my wife left her job and went back to the store as 1/2 owner. All the employees knew of the deal as well as family and friends. She was even put on the business bank account and they were spliting everything Bills and Profits. Unfortunately there are not many profits for icecream when it is cold in NY, but the bills were plenty. Now that it is warming up and the business is starting to produce good cashflow my wife gets a letter that says sorry but I can not sell you 1/2 of my business. By the way the divorce was finalized a while ago and multiple excusses have been used to postpone signing the agreement. She (the owner) is under the impression that because she did not sign there is no liability at all.
1. Is she right? I thought that a verbal contract could be as binding as a written one, especially when we have a copy of the agreement and her letter saying that she is no longer going to honor it, proving that it was in fact an agreement they were using.
2. If I am right, How do we go about retribution? Do we have to sue her for breach of contract?
3. Is my wife entitled to proceeds that were generated using funds that were dispersed while she was still actively a partner?
4. What type of lawyer is best suited for this case?
Thanks for any help/guidance you can provide.

 

[mrsandman]

this is a very unfortunate case, very careless mistake done by your wife... you should have signed everything on piece of paper, verbal agreements mean nothing! (unless you tape recorded them)

 

[NYClex]

Under Rizika v. Potter a New York case from 1947, a partnership arises only if there is a contract among associates that a partnership shall exist. This contract can be express or implied, written or oral, formal or informal. The courts will apply a series of tests to determine if the conduct of people shows that a partnership existed: the parties intention will be tested, the court will look if there is a co-ownership of the business and if profits were shared. The last point usually makes a pretty good prima facie case for a partnership.

So, you might have a good case here. You should consult an attorney and go from there. You would want to look for an attorney who has experience with partnership, corporation and similar business matters and also litigation, if it comes to a trial.

Of course, the partnership issue is not the only one here, there are more issues as to who actually owns what. And here the lack of a written contract can be a serious problem, for example when it involves ownership of land. But these are very complex issues that you better discuss with an attorney.