Business relationships often start with a simple understanding. Someone has an idea. Someone else has the skills, contacts, or platform to help make it happen. The parties agree generally on the work to be done and how they expect to divide the proceeds. They begin performing before anyone insists on a detailed written agreement. That may be enough to get a project off the ground. It is often not enough to resolve the dispute when the relationship breaks down.

An unpublished August 25, 2026, decision from the Superior Court of New Jersey, Law Division, Camden County, illustrates the point. In Smith v. Bodyworks Publishing LLC and Barbara Jean Dowlen, the court was asked to sort through two oral publishing arrangements, competing claims over the authorship of a memoir, roughly $42,000 in customer presales, and a deteriorated business relationship in which both sides accused the other of fraud, bad faith, and interference with business opportunities. After a nine-day bench trial, the court rejected the principal contract, fraud, Consumer Fraud Act, implied-covenant, and tortious-interference claims asserted by both sides. The defendants nevertheless recovered $10,000 on an unjust-enrichment claim. The court also had to decide how to handle approximately $35,000 placed in defense counsel’s client trust account during the litigation.

The decision presents an important practical lesson for business owners: an oral agreement may be enforceable, but it may be a very incomplete agreement. It’s better to have business agreements reduced to a written agreement.

A business arrangement built on oral understandings

The first project involved a proposed book about Ian Smith’s and his then-business partner Frank Trumbetti’s experiences operating Atilis Gym during the COVID-19 pandemic. Smith, Trumbetti, and Barbara Jean Dowlen agreed orally that Dowlen would write, edit, publish, and promote the book, later titled Two Dumbb Gym Owners. They agreed that the book would sell for $24 and that future proceeds would be divided among Smith, Trumbetti, Dowlen, shipping, and publishing expenses. That was largely the extent of the deal. There was no agreed deadline for the book’s completion. There was no provision requiring Smith or Trumbetti to work exclusively with Dowlen. There was no agreement addressing ownership of research, drafts, or the finished manuscript. There was no termination provision. There was no provision explaining whether Dowlen would be paid for work performed if the project ended before publication. And there was no agreement requiring that customer presale money be segregated, escrowed, or reported to the other participants. After the first project was abandoned, Smith and Dowlen entered a second oral agreement for Smith’s individual memoir, Find Your Hill. The parties again agreed on a proposed split of future book-sale proceeds. Again, they did not reduce the full arrangement to a signed writing. The case therefore did not involve a complete absence of contract. It involved contracts that resolved only a few of the many issues that mattered once the relationship fell apart.

An oral agreement may still be a contract

Business owners sometimes assume that there is no enforceable service agreement until everyone signs a formal document. That is an inaccurate assumption. An oral agreement may be enforceable if the parties objectively demonstrate an intent to be bound and agree on sufficiently definite essential terms. Offer and acceptance may be expressed in words or demonstrated through conduct. A party who accepts services, begins performing, or receives the benefits of an agreement may have difficulty later claiming that no agreement existed. The fact that the parties expect to sign a more formal agreement later does not necessarily mean that they are free from obligations in the meantime. If they have already agreed on the essential terms and begun to perform, a court may find that a binding oral contract exists. At the same time, not every discussion or preliminary understanding becomes a contract. If the parties have not agreed on essential terms, or if they make clear that they do not intend to be bound until a written agreement is executed, a court may find that no contract was formed. That distinction matters. An oral agreement can create real legal obligations, but it may not contain the protections a party assumes are part of the deal.

The court enforced the agreements the parties actually made

The court found that the oral agreements in Smith were enforceable. The parties did not meaningfully dispute that they had agreed to the basic publishing arrangements or the contemplated allocation of book-sale proceeds. But the court declined to add terms the parties had never agreed upon. The agreements did not require Smith to work exclusively with Dowlen. The court therefore found that Smith was free to cancel the first project and free to complete and self-publish his individual memoir. Smith did not breach the agreements merely because he chose to move forward without the defendants. The court also rejected the defendants’ demand for broader reimbursement of expenses. The oral agreements set aside a portion of potential future book-sale proceeds for shipping and publishing costs. But the court found no agreement requiring Smith to reimburse Dowlen for all expenses incurred if the project ended before the book was published. This is one of the clearest lessons from the case. A court will not ordinarily create a termination fee, exclusivity obligation, expense-reimbursement provision, or ownership right merely because the parties would have been better served by including one.

The unsigned written agreement showed what was missing

The parties did, at one point, consider a more formal written agreement for Find Your Hill. That draft included provisions addressing exclusive publishing rights, the term of the agreement, writing and editing fees, early termination, and manuscript-preparation responsibilities. But it was never signed. The court refused to treat those draft provisions as part of the oral deal. The parties’ rights had to be determined by the agreements they actually made—not the agreements they “could or should have made.” That issue comes up often in business disputes. The parties exchange drafts, negotiate terms, and start work while assuming the formal agreement will be completed later. If the relationship sours before that happens, the parties may find themselves bound by a narrower agreement than either of them expected. If the parties do not want to be bound until a formal agreement is executed, their communications should say so clearly. More importantly, their conduct should be consistent with that position. It is difficult to insist that a deal was nonbinding while simultaneously directing performance, accepting deliverables, collecting customer money, and operating as though the parties have already committed to the project.

Customer presales need a written structure

The presale process caused many of the case’s most serious problems. Customers purchased books through the Bodyworks website. The money went through a payment processor and into Bodyworks’ business account. Smith and Trumbetti did not have backend access to the website, the payment processor, or the bank account. The court found that presale funds were used for project-related and unrelated business expenses, as well as personal expenses. Smith testified that he believed the money was being held safely, separately, or in escrow until the books could be delivered and the proceeds divided. The court found, however, that this was an unspoken expectation rather than an agreed contractual term.The oral agreements did not require the money to be escrowed or maintained in a segregated account. They did not prohibit use of the money for expenses. They did not establish an accounting procedure, require preapproval of expenditures, or give Smith access to the payment-processing records. The court also found no implied fiduciary duty requiring the defendants to keep the funds separate. That does not mean that commingling customer money is a prudent business practice. It means that the parties failed to contract for the protections one side later assumed existed.

Any business that accepts deposits, presales, retainers, subscription payments, or other customer advances should decide at the outset:

• Where the money will be held.
• Whether it must remain in a separate account.
• Whether it may be used before the product or service is delivered.
• Which expenses may be paid from it.
• Whether a party must obtain approval before incurring material costs.
• What financial reports will be provided and when.
• Who owns the customer list and underlying transaction data.
• Who may communicate with customers and issue refunds.
• What happens if the project is delayed, canceled, or transferred to another provider.

Those provisions are not legal boilerplate. They are part of the business arrangement itself.

The manuscript dispute became an ownership dispute

The parties disagreed sharply over who wrote the final version of Find Your Hill. Dowlen undisputedly wrote an October 2022 draft. Smith later substantially revised the manuscript and produced a December 2022 version. The court attributed that version to Smith and found that the published book differed substantially from Dowlen’s original draft. It therefore rejected the defendants’ claim that Smith had published Dowlen’s manuscript and owed her the agreed $7-per-copy royalty. The defendants did not present expert testimony comparing the drafts or addressing manuscript quality, publishing standards, or ghostwriting practices. The court’s analysis did not end there, however. Although the court found that Smith wrote the published version, it also found that he retained some benefit from Dowlen’s work. Smith had described his revision process as taking the “nuts and bolts” of the story Dowlen had told and putting it into his own words. The court concluded that Dowlen’s earlier draft, promotional efforts, and involvement in the presale process had conferred a benefit on Smith. That finding supported the defendants’ unjust-enrichment claim.

For business owners, the message is straightforward. If the engagement involves work product—whether a manuscript, software, a marketing plan, research, design files, product specifications, a customer list, or a business-development strategy—the contract should say who owns it and what happens if the relationship ends.It should also address whether a client may use incomplete work, whether a replacement vendor may continue a project, and whether the original provider is entitled to a fee, buyout, royalty, or other compensation if its preliminary work is later incorporated into the finished product.

The Consumer Fraud Act applied in theory, but not on the facts

Smith also asserted a claim under the New Jersey Consumer Fraud Act, or CFA. The CFA is a broad remedial statute that prohibits deceptive, fraudulent, unconscionable, and other unlawful commercial practices in connection with the sale, advertisement, or subsequent performance of transactions involving merchandise or real estate. “Merchandise” includes services offered directly or indirectly to the public. The defendants argued that the CFA did not apply because the relationship involved a customized, or “bespoke,” publishing arrangement. The court disagreed.In determining whether the CFA applies in a business-to-business setting, New Jersey courts look to the nature of the transaction. Relevant considerations include the complexity of the transaction, the sophistication of the parties, whether they were assisted by lawyers or experts, the nature of their relationship, and whether the relevant goods or services were available to the public. The court found that the publishing services potentially fell within the CFA. The agreements were simple, directly negotiated, and made without attorneys or experts. The defendants also marketed their services to the public. The fact that the services were customized to Smith’s story did not automatically put the transaction beyond the statute’s reach.

But potential applicability is not the same as liability.A CFA claim may be based on an affirmative act, such as a false statement or misrepresentation; a knowing omission of material information; or a violation of regulations adopted under the statute. An affirmative misrepresentation can be actionable without proof that the speaker intended to deceive. A claim based on an omission, by contrast, generally requires proof that material information was knowingly withheld with the intent that the other party rely on the omission.

A private plaintiff seeking damages must still prove an unlawful practice, an ascertainable loss, and a causal connection between the unlawful conduct and that loss. Smith did not establish those elements. The court rejected his allegations that Dowlen misrepresented her writing and publishing credentials. It found that much of the evidence on which Smith relied—website statements and social-media posts—appeared after the parties’ relationship had already begun. The court also credited Dowlen’s denial that she had claimed to write or publish books for the particular celebrities appearing in later posts. The court further found that Smith did not prove a measurable loss caused by any alleged misrepresentation. He had not paid Dowlen for the writing services, had canceled the first project, and did not establish a quantifiable loss in value tied to the alleged conduct.

The CFA can dramatically increase the stakes in a business dispute because a successful private claimant may recover treble damages, attorneys’ fees, filing fees, and costs. But the statute is not a catch-all remedy for a disappointing business relationship. The claimant must still establish an unlawful practice and a measurable, causally related loss.

Tortious interference was not the answer

Both sides also asserted claims for tortious interference with prospective economic advantage. New Jersey law recognizes that a business may have a protectable interest in a prospective economic opportunity even if no enforceable contract has yet been formed. For example, a company may have an actionable claim if an outsider improperly interferes with a reasonably expected sale, customer relationship, distribution arrangement, commission, or other concrete business opportunity. But the claim requires more than a belief that someone “hurt the business.” The plaintiff must show a reasonable expectation of economic benefit, intentional and unjustified interference, a reasonable probability that the expected benefit would have been realized without the interference, and actual damages. “Malice” in this context does not necessarily mean personal animosity. It means that the defendant acted intentionally and without justification or legal excuse. A critical limitation is that the alleged interferer generally must be a stranger to the prospective economic relationship. A party ordinarily cannot tortiously interfere with its own contract or direct business relationship. If the claim is really that a counterparty failed to perform its own obligations, contract law—not tortious interference—usually governs the dispute. That principle defeated much of the tortious-interference analysis in Smith.

Smith argued that Dowlen interfered with his expected economic advantage by retaining control over presale funds, threatening to issue refunds, and failing to provide customer information in the form he wanted. The court found no proof that her conduct caused Smith to lose particular sales or other identifiable business opportunities. The presale customers had already paid for the book, and Smith did not demonstrate that the defendants’ conduct prevented him from selling additional books. The court also found that the dispute over customer funds and records arose from the parties’ own joint business arrangement. That type of dispute ordinarily sounds in contract, not tortious interference. The defendants’ claims failed for similar reasons. They did not establish that Smith caused identifiable publishing clients to leave or that they suffered provable damages. The court also found that Smith was not a stranger to the presale-customer relationships; the customers were buying a book about Smith as part of the parties’ collaborative project.

For a business to preserve a meaningful interference claim, it should be able to identify the prospective customer, the anticipated transaction, the allegedly wrongful conduct, the connection between that conduct and the lost opportunity, and the actual economic loss.

The implied covenant did not fill the gaps

Both sides alleged breach of the implied covenant of good faith and fair dealing. Neither prevailed.

New Jersey implies a covenant of good faith and fair dealing into every contract. But that covenant does not create important obligations that the parties never negotiated. It is not a substitute for an exclusivity provision, a deadline, an expense-reimbursement clause, a customer-funds protocol, or a work-product ownership clause. The court found that Smith did not act in bad faith by completing and self-publishing his memoir because the oral agreement did not require exclusivity. It also found that the defendants’ handling of the presale funds did not establish the bad motive, deception, or evasion necessary to prove a breach of the implied covenant under the agreements actually made. The practical lesson is that “good faith” language cannot solve a problem that a clear contract provision would have prevented.

The defendants recovered $10,000 for unjust enrichment

The defendants’ most successful claim was unjust enrichment. The court found that Smith benefited from Dowlen’s services even though Smith substantially rewrote the manuscript and ultimately published the book himself. The court also found that some expenses incurred by Dowlen benefited Smith’s interests in Atilis. The proof was far from perfect. Dowlen did not provide a reliable total of the claimed expenses, did not adequately distinguish among expenses for Smith, Trumbetti, and herself, and did not present receipts or other evidence sufficient to establish the precise value of the services and expenditures. Even so, the court found that it would be inequitable for Smith to retain the benefit without compensating Dowlen. It awarded $10,000—$6,000 for Dowlen’s contribution to the eventual book and $4,000 for expenses benefiting Smith’s interest in Atilis. The result is a reminder that a party may lose its contract claim and still prevail on an equitable claim. It is also a reminder that poor documentation can substantially limit recovery.

The money belonged, at least in part, to customers

The case also required the court to deal with approximately $35,000 placed in defense counsel’s client trust account during the litigation. The court noted that those funds did not consist of the original presale receipts; they were deposited from other sources. The court did not treat the money as belonging entirely to Smith or entirely to the defendants. For customers who had received Smith’s published book, the court concluded that the proceeds were generally allocable to Smith, subject to the $6,000 portion of the unjust-enrichment award related to the memoir. But for customers who had paid and never received a book, the court viewed the money as belonging to those customers. The customers were not parties to the case, so the court considered which litigant was better positioned to provide books or refunds and which litigant was more likely to face customer claims. The court determined that Smith was in the better position to fulfill the orders or provide refunds because the customers were primarily interested in Smith and his story, Smith had relevant customer information, and Smith could provide books or refund payments. That part of the decision is especially important for businesses handling advance payments. Customer money is not merely revenue to be divided among business partners. If a project fails, the customer’s rights may be more important than either party’s claim to the funds.

The takeaway for business owners

The dispute in Smith v. Bodyworks Publishing involved an unusual business arrangement, but the underlying problem is common. The parties agreed on enough to begin working together. They did not agree on enough to manage the relationship when it changed. For owners entering a collaborative venture, consulting engagement, revenue-sharing arrangement, publishing deal, software-development project, marketing relationship, or other service-based business arrangement, the agreement should address the issues most likely to create a dispute:

• The contracting entity and the individuals authorized to act for it.
• Scope of work, deliverables, milestones, deadlines, and approval rights.
• Exclusivity, if any.
• Ownership of drafts, research, data, customer lists, source materials, and final deliverables.
• Payment terms, expense approvals, and reimbursement obligations.
• Treatment of deposits, retainers, presales, and customer advance payments.
• Access to financial records and customer information.
• Authority over refunds, fulfillment, and customer communications.
• Termination rights, notice requirements, transition obligations, and payment for work in progress.
• Rights to use unfinished work after termination.
• Confidentiality, non-disparagement, and public-communications provisions where the project depends on reputation or customer goodwill.

The most important contract provisions are often not the ones governing the successful performance of the deal. They are the provisions governing what happens if performance stops.

Conclusion

Smith v. Bodyworks Publishing is a case about the consequences of leaving important business terms unresolved. The parties agreed that books would be written and published and that future sales proceeds would be divided. But they did not define exclusivity, deadlines, ownership, expense reimbursement, customer-fund handling, financial reporting, customer-data rights, termination, or post-termination use of work product. When the relationship broke down, the court did not write those terms for them. It applied the limited agreements the parties had made, rejected attempts to turn the contract dispute into broader fraud and tort claims, and used equitable principles to resolve only part of the resulting problem. The business lesson is simple: do not confuse a workable understanding with a complete agreement. The time to decide who owns the work, controls the money, communicates with customers, and pays when the relationship ends are before the relationship ends.