Written by attorney Ty Hyderally

Is the Statute of Frauds a Defense to a Claim of an Implied in Fact Agreement?

The majority position is that the statute of frauds applies to oral employment agreements. The statute of frauds may be sufficient to defeat a claim of an oral agreement of employment for a period of years. But if the court finds that the terms of the contract are such that the contract could have been performed in one year, the statutory requirement has been satisfied. McKenny v. John V. Carr & Son, Inc., 922 F. Supp. 967 (D. Vt. 1996). In Hodge v. Evans Financial Corp., 778 F. 2d 794 (D.C. Cir. 1985), the court found that a promise of "lifetime employment' 'was void under the statute of frauds, because the agreement could not have been performed in one year. The court suggested that had the promise been for employment "until retirement," it would have ruled differently, as the employee could have retired within one year. The court rejected plaintiffs claim that he could have died within one year and therefore the statute of frauds was satisfied. On rehearing, however, the court changed its view, ruling that the contract would have been fully performed had plaintiff either died or retired within one year, and therefore was not invalidated by the statute of frauds. Hodge v. Evans Fin. Corp., 823 F. 2d 559 (D.C. Cir 1987).

Also, where the implied in fact contract claim includes both oral statements and writings, the writings may be sufficient to overcome the statute of frauds.

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