On supermarket chains, spoken agreements, and suing family.

SC and HL are father and son. They worked together in a family company, under which they operated several supermarkets. The business shuttered in 2018.

Shortly after, Shin Min News ran an article about disagreements within the family.

In 2020, the son sued his father regarding shareholding in another company. They managed to settle the dispute.

But less than 3 months later, the son commenced a fresh lawsuit against his father.

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The son claimed that in 2011, he wanted to leave the company to take up another job with more pay. However, he did not to do only because he and his father orally agreed that by 2016, the son would receive (a) "at least" 60% of the company; and (b) 60% of the properties used for the supermarket business.¹

The father disagreed that there was any such agreement.

The matter went to trial.

The Court dismissed the son's claim.

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I highlight 3 takeaways from the judgment for savvy businesspeople.

1) The Court held that there was insufficient evidence of any such oral agreement. There was no documentary evidence of its existence - not even any personal written record on the son's part. The son therefore failed to prove that the oral agreement existed.

TAKEAWAY:

Folks, I've said it before, and I'll say it again: oral contracts aren't worth the paper they're written on.² They are theoretically enforceable, but the challenge is in proving their existence, and their precise terms. If given a choice, you'd prefer to sue on a written, as opposed to oral, contract.

If you've been promised something that matters to you, get it recorded, and get the other party to sign off.

2) The Court held that even if there was an oral agreement, it could not be enforced as the terms were uncertain. In particular, the clause that the son would receive "at least" 60% of the shares in the company meant that he was entitled to 60% - 100% of the shares, and made any oral agreement unworkable.

TAKEAWAY:

If you intend to enforce a contract, make sure the terms are as certain and defined as possible. You may think that you are doing the other party a favour by keeping the precise terms open, and so that you can later on exercise your discretion in their favour. Nonsense. Get precise terms in writing first. Later, you can always vary the terms to the other party's advantage.³

3) The Court held that the son and the father had not "intended to create legal relations". In simple terms, the law generally assumes that in a domestic context, parties have no intention to create legal relations and enter into legally-enforceable obligations.⁴

TAKEAWAY:

In the first place, I generally don't recommend suing family members. But if you must, take advice on how your lawyers intend to rebutt this legal presumption. Don't be surprised by this issue only after commencing litigation.