Mackay sued Four Rivers Packing Co. (Four Rivers) for breach of contract when Mackay’s employment was terminated after Four Rivers agreed to employ Mackay until his retirement.
Under the statute of frauds, an agreement that cannot be performed in one year is invalid if the agreement is not in writing.
Mackay was hired and laid off by Four Rivers Packing Co. (Four Rivers) in 1999. Four Rivers rehired Mackay in 2000 and orally agreed to employ Mackay until his retirement. Mackay was terminated in 2003 and sued Four Rivers for breach of contract. Four Rivers filed a motion for summary judgment, claiming that the oral agreement could not be enforced under the statute of frauds. The trial court granted summary judgment to Four Rivers and Mackay appealed.
Whether an oral agreement that cannot be performed in one year invalid under the statute of frauds?
Yes. The judgment of the trial court is reversed and remanded. The agreement did not violate the statute of frauds because Mackay could have retired within one year.
If performance of the contract can be completed within one year, then the oral agreement is enforceable under the statute of frauds, regardless of whether or not the contract is likely to be completed in a year or the parties do not expect for the contract to be completed within a year.