Plaintiff, an entrepreneur, appealed a summary judgment from the Superior Court of Santa Clara County (California), which ruled in favor of defendant, a software company, in an action for breach of contract and wrongful dissociation. The parties were represented by their own California small business attorney.

Overview

The parties discussed creating a joint venture to market software. Many contractual terms remained uncertain well beyond the time the contract was alleged to have come into existence. The parties had not made clear the amount of money that needed to be raised from outside investors and were still discussing the form and amount of compensation for the entrepreneur. Accordingly, the court held that the terms of the alleged oral contract were fatally uncertain. The failure to reach a meeting of the minds on all material points, within the meaning of Civ. Code, §§ 1580, 1550, 1565, prevented the formation of a contract even though the parties might have orally agreed upon some of the terms or have taken some action related to the contract. The parties understood that significant third-party involvement in the enterprise would be necessary. There was no mutual consent to create a company without investor financing, which in turn required an agreement on the contemplated network of relationships. Because essential terms were only sketched out and were contingent upon the actions of third parties, there was no more than an agreement to agree, which was unenforceable under California law.

Outcome

The court affirmed the trial court's judgment.

Procedural Posture

Plaintiff attorney appealed a judgment entered by the Superior Court of Los Angeles County (California). The judgment sustained defendant client's general demurrer to the attorney's complaint for compensation, which he filed after the client discharged him from representation.

Overview

The attorney, who was discharged without cause by his client, sought recovery of damages equal to the full fee specified in the contingency agreement he entered into with the client, regardless of the reasonable value of his services or the extent of the work performed. The trial court sustained the client's general demurrer without leave to amend and the attorney appealed. The court affirmed the judgment of the trial court and held that the action for declaratory relief was premature because the amount of any possible award could not be determined before disposition of the client's underlying claim. The court also held that the client's discharge of the attorney without cause did not constitute a breach of their contingency fee contract that made the client liable for damages on the contract.

Outcome

The court affirmed the trial court's judgment. The court found that the client had both the power and right to discharge his attorney any time, with or without cause, and held such a discharge did not constitute a breach of contract because the law implied as a basic provision, that the client may terminate the contract at will. The court also held that the attorney's action for reasonable compensation accrued only when the contingency occurred.