I read that story. Why is it "right" that a label would get to keep the rights to a band's recordings forever?
The court, anyway, didn't care that the contract was oral. Oral contracts are enforced all the time. The problem was they didn't spell anything out. The problem with oral contracts is when people disagree about what was said.
Bands that license their works to record labels, need to have some mechanism to revoke that license if they have legitimate complaints. They shouldn't have to wait for a label to do what Lookout! did (which was to breach its side of a lot of contracts by not paying royalties, afaik).
Gibby Haines view was that "you are getting 50% of the profits of a backcatalog whose value has gone up because of our major label success, and I don't think you deserve this windfall so pay me more." Maybe this is "greedy" or just socially unacceptable or something, I don't know. As a starting position I don't get outraged when a band wants more money from a label, even when it's a not-good-anymore band led by a prick, and the coolest record label on earth.
Mike Monteiro, graphic designer of "Fuck you, pay me" fame, talks all the time about the importance of contracts. All you're doing is deciding how to proceed just in case things go wrong and both parties start to hate each other's guts--you don't need a lawyer for that. Shit, just have a long conversation about it and tape record it or something.