Part II in a Series about the Statute of Frauds

This article is the second in a series of articles covering the Statute of Frauds.  We previously discussed that an agreement that is not capable of being performed within one year from the date of the contract, must be in writing to be enforceable.  Here we examine exactly what this means.

In general, there are three types of agreements that one might find themselves involved with, in which they must make the determination regarding whether the contract can be performed within one year.  We examine them each in turn below by way of examples.

The agreement provides for a specific time period

Obviously if the agreement is for one year or less, the contract falls without the Statute of Frauds.

If the agreement states that it is for three years of employment, for example, then the contract can only be fully performed in three years and falls directly within the Statute of Frauds and must be in writing.  The contract cannot be fully performed within one year.

It does not matter that, for example, the employee might die.  Death would only excuse performance, it would not cause the contract to be fully performed.

It does not matter if the contract states that there can be early termination with notice.  Early termination also would excuse performance, it would not cause the contract to be fully performed.

Keep in mind that in calculating whether the contract can be performed within one year, the one year must be calculated from the date the agreement is entered into, not from the date the performance commences under the agreement.

The agreement specifies a particular task to be completed

If there is no time limit specified to complete the task under the agreement, it must be determined whether the task can be completed within one year.  The determination is made at the time the agreement is entered, not once the task is completed.  So, even if the task theoretically could have been completed within one year but it actually took longer than one year to complete, it would fall outside of the Statute of Frauds and would not require a writing.

In determining whether the task can be completed within one year, it really is a theoretical question.  You must ask, “If one had unlimited money and manpower, could this task be completed within one year?”  If the answer is “yes,” the contract falls outside of the Statute of Frauds.

The agreement is a “life contract”

A life contract never falls within the Statute of Frauds because it is always possible that it could be fully performed within one year.  If a person were to die prior to one year passing, they would have fully performed the agreement and thus, these types of agreements do not need to be in writing to be enforceable.

Remember, even if your agreement is not legally required to be in writing to be enforceable under the Statute of Frauds, there are many other reasons why it ALWAYS is a good idea to put your agreements and contracts in writing.

Stay tuned for future articles covering other topics related to the Statute of Frauds!!

Previous Articles in this Series:

Does My Contract Need To Be In Writing?

Upcoming Articles:

• Has There Been Performance Such that My Contract No Longer Needs to be in Writing?
• We Have Evidence of Our Contract – Is it Enough to Qualify as a Writing?
• What if we Modify our Written Contract that Was Originally Governed by the Statute of Frauds?