Brief Fact Summary. The Defendant, Flagship Properties, Inc. (the "Defendant"), contracted with another builder to complete Plaintiff, C.R. Klewin’s (the "Plaintiff"), work, because he was not satisfied with the Plaintiff’s performance. The Defendant claims the agreement is not enforceable because it was not in writing.
Synopsis of Rule of Law. A contract is not within the statute of frauds (SOF) unless its terms are so drawn that it cannot by any possibility be performed fully within one year.
Issue. Plaintiff appealed to the Second Circuit. The Second Circuit certified the following questions to the Connecticut Supreme Court:
• Whether under the SOF an oral contract that does not specify the time for performance falls explicitly outside of the SOF?
• Is it unenforceable when the performance is contemplated to be finished in more than one year, but does not negate the possibility of being performed within one year?
Held. Historically, the one-year rule to the SOF was seen to combat the failure of evidence and memory. However, this cannot be the case because the one-year period does not run from the making of the contract to the proof of making, but from the making of the contract to the completion of performance. (i.e., if an oral contract cannot be performed within one year, but is broken a day after it is made, the provision applies even though the contract is still fresh in their minds). Another rationale for the provision was to distinguish a significant contract of long duration from less significant contracts of short duration. However, this purpose is not applicable to the SOF because the period does not run from commencement of performance to the completion.
• The court said there is no legitimate purpose served by this statute anymore so, it decided to limit its application. The court adopts the narrow view that unless it appears from the agreement itself that the contract is not to be performed explicitly within one year, the statute does not apply. A contract is not within this clause unless its terms are so drawn that it cannot by any possibility be performed fully within one year.
Discussion. This case offers an interesting analysis of one exception to the SOL.