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Contracts • Defenses to Enforcement and Formation
K#055
Legal Definition
If a contract specifies: (1) a time period of performance longer than one year, or (2) an end-date more than one year from the date of the contract, then the Statute of Frauds applies.
However, if the contract: (1) involves a contract for life, or (2) does not specify a time (as a task is always inherently capable of performance within a year), the Statute of Frauds does not apply.
However, if the contract: (1) involves a contract for life, or (2) does not specify a time (as a task is always inherently capable of performance within a year), the Statute of Frauds does not apply.
Plain English Explanation
Don't over think these types of contracts. It isn't about whether or not someone may be able to complete a task within a year -- it is about whether it is even possible for it to be completed in a year. This usually comes down to two categories. The first is when there is an agreement that a person will work for a certain period of time, and that period of time is more than a year (it'd be impossible to do more than a year's worth of work within a single year). The second is when the agreement includes an end date that extends out into the future more than a year.
Why go through all this trouble? The courts are basically saying, "Look -- if you have a work contract where someone has promised to hire you (or you have promised to hire someone else) for work that lasts 1 year or less, then even though it's smarter to get it in writing, you don't have to get it in writing. HOWEVER, if you plan on being hired or hiring someone for something beyond a year, you better get it in writing or don't come crying to us if something goes wrong."
Why go through all this trouble? The courts are basically saying, "Look -- if you have a work contract where someone has promised to hire you (or you have promised to hire someone else) for work that lasts 1 year or less, then even though it's smarter to get it in writing, you don't have to get it in writing. HOWEVER, if you plan on being hired or hiring someone for something beyond a year, you better get it in writing or don't come crying to us if something goes wrong."
Hypothetical
Hypo 1: Bob wants to hire Sam to cut his lawn. Sam says, "You can pay me $50 per month or, if you want to save some money and sign up for a 2 year contract, it'll be only $45 per month." Bob agreed to the 2 year contract. After 14 months of lawn cutting, Bob decides he no longer wants Sam's service and tells him he is going to cut his lawn himself. Result: Bob's oral contract with Sam was for 24 months of service, which is 12 months longer than is allowed by the Statute of Frauds without a written, signed contract. Thus, the Statute of Frauds is not satisfied. Practically, this means when Sam tries to bring a case against Bob for breach of contract, the court will say, "What contract?" Sam will say, "My 2 year contract with Bob." The court will say, "Do you have it in writing?" Sam will say, "No, but we pinky swore." The court will say, "Your claim does not satisfy the Statute of Frauds, so we can't help you. Get out."
Visual Aids
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