Brief Fact Summary. Plaintiff Power Entertainment, Inc., and Defendant, National Football League Properties, Inc., orally agreed that Plaintiff would take over the licensing agreement between Defendant and Pro Set, Inc. in exchange for Plaintiff assuming the debt of Pro Set, Inc. to Defendant in the amount of approximately $800,000.
Synopsis of Rule of Law. Under the “main purpose doctrine,” the suretyship statute of frauds provision, which requires that any promise to answer for the debt of another must be in writing, does not apply whenever the main purpose for making the promise to answer for the debt of another is to serve oneself and not to answer for another.
Issue. Should the case be dismissed for the reason that the oral agreement is unenforceable against the defendant under the suretyship statute of frauds?
Held. No. The purpose of the suretyship statute of frauds is to protect the person alleged to have guaranteed the debt of another. Here, however, it is the party who has guaranteed the debt of another who wants to have the contract enforced. Under the “main purpose doctrine,” the suretyship statute of frauds does not apply where the main purpose of the surety is not to answer for the debt of another but rather to serve his own purposes. Hence, since Plaintiff wishes to have the contract enforced, the main purpose doctrine applies, and the suretyship statute of frauds does not apply.
However, there is an exception where the plaintiff can prove that an oral promise to answer for the debt of another is supported by a new consideration moving to the promisor and beneficial to the promisor and that the promisor has become in the intention of the parties a principal debtor primarily liable.View Full Point of Law