Law School Discussion

Contracts Question

Contracts Question
« on: March 06, 2005, 11:31:46 AM »
 ???I know that part performance is an exception to the statute of frauds defense, but I am not clear if it is an exception to oral contracts that cannot be performed within a year (such as employment contracts). If it applied  to such contracts wouldn't it defeat the statute's purpose of having these types of contracts in writing? And will part performance preclude the statute of frauds defense for suretyship agreements? I am very confused.

Re: Contracts Question
« Reply #1 on: March 06, 2005, 06:14:15 PM »
I'll take a stab at this.

First, the UCC provides a couple of exceptions to the r
required writing for sale of goods $500 or more.

A. Part performance by beginning to manufacture goods specially made for a specific customer and that can't be easily sold to others.

B. Goods have been made, delivered and accepted.  Seller can then enforce payment.

Other than that, the part performance exception requires the part performance be enough to prove the existence of a contract (one rationale for the statute of frauds to document certain contracts to prevent fraud) and usually requires the party seeking enforcement to have done something in reliance of the unwritten contract.  Part performance is a substitute for the writing.  This is tough to meet.  For example, working for 2 years on a 5 year employment contract and then getting fired doesn't necessarily prove that there was a enforcable contract for 5 years; only that there was one for the 2 years worked.

Re: Contracts Question
« Reply #2 on: March 06, 2005, 07:32:05 PM »
Other than that, the part performance exception requires the part performance be enough to prove the existence of a contract (one rationale for the statute of frauds to document certain contracts to prevent fraud) and usually requires the party seeking enforcement to have done something in reliance of the unwritten contract.  Part performance is a substitute for the writing.  This is tough to meet.  For example, working for 2 years on a 5 year employment contract and then getting fired doesn't necessarily prove that there was a enforcable contract for 5 years; only that there was one for the 2 years worked.


Ah, this makes perfect sense now. If I understood you correct, part performance exception requires that it evidences the alleged contract, therefore it cannot be used to enforce a contract that was within the one year provision because unless the party completed performance, it would not meet its requirement of proving the contract. Makes sense to me! Thanks!

So for a party who is fired after 2 years on a 5 year employment, the only other exception available would be reliance or restitution?


Re: Contracts Question
« Reply #3 on: March 13, 2005, 07:41:50 PM »
The whole thing about the statute of frauds is that the courts just do not like this idea of making writing mandatory -- yet, they do understand that an oral contract is worth nothing, so they try to find a middle ground ..

Re: Contracts Question
« Reply #4 on: March 13, 2005, 10:40:00 PM »
Jen - I concur with what Coregram said.  The UCC example is a good illustration of how partial performance can negate the need to have a K in writing.  However pay attention to the part where he says if you work for 2 years on an oral agreement, and get fired, all you have proven is the agreement for 2 years, even if it was supposed to be for 5.  This is Quantum Meruit.  See Britton v. Turner 6 N.H. 481.

You asked about reliance or restitution damages for the guy who gets fired before his K is up.  Here's the tricky part.  Reliance or Restitution would theoretically make sense because you can argue that the guy relied on the 5 year K to his detriment and blah blah blah.  However, be careful with that.  What a lot of law school students fail to realize is that employment K's (whether Oral or Written) are at-will employment K's.  Meaning, a company has a legal entitlement to fire the employee (technically breaching the K) at any time without consequence, so long as they have paid the employee up until that time of termination.