Story Case

Arthur Bowers said to Abel Hansen: "If you will work for me one year, beginning the first of next month, I will pay you $100 a month." Hansen replied that he would accept the offer and begin work on the first of the following month. A week later, on the first of the month, in accordance with the contract, Hansen appeared, ready to work. Bowers then informed him that his services would not be required. Hansen brought suit upon the contract, and Bowers put in as defense that Hansen could not recover because the contract was one which could not be completed within a year from the date of its making, and therefore could not be enforced since it was not in writing. Is this correct?

Ruling Court Case. Myers Vs. Roberts, Volume 46 Of The Arkansas Reports, At Page 80; Also Volume 55 Of The American Reports, Page 567

In this case, Roberts complains that on October 13, 1882, he had been employed by Meyer as manager of the latter's plantation for the remainder of that year and also for the following year, provided neither of the parties should object on the first day of January, 1883, to the continuance of the arrangement; that Meyer agreed to pay him $100 per month and to allow him a house free of rent; that he entered upon the work and continued as manager until May 1st, 1883, when Meyer discharged him without cause. It appears that Meyer paid him for his services already performed and that he discharged him for the reason that he decided that the wages were excessive.

Roberts in this action asks damages caused by being thrown out of employment for the remainder of the year. Meyer insists that he was not legally entitled to any such damages because their agreement was under the Statute of Frauds. Meyer further claims that the agreement was unenforcible, because it was not to be performed within a year's time.

By statute in Arkansas, substantially the same as in most states, it was provided that no action shall be brought to charge any person upon any contract that is not to be performed within one year from the making thereof, unless the contract or some memorandum or note thereof shall be made in writing, signed by the party to be charged or by his agent.

Justice Smith gave the decision: "A contract for personal services to continue and hold the parties together for a longer period than one year is plainly within the statute. Thus, if at Christmas, I orally hire a servant for a year, to begin New Year's Day, I am not legally bound to receive him into my services when he presents himself at the time appointed in fulfillment of that contract. If I do receive him, I may afterwards discharge him without incurring any other liability than the payment of his wages for the time he actually served." In accordance with the foregoing principles announced by the Court, it was held that Roberts could not recover for the unexpired part of the contract.

Ruling Law. Story Case Answer

The Statute of Frauds, which has been substantially re-enacted in most states in this country, provides that no action shall be brought upon any oral agreement that is not to be performed within one year from the making of the agreement. From this it follows that, where oral authority is conferred upon the agent which contemplates his serving the principal for more than one year from date of appointment, neither agent nor principal has any remedy for non-performance by the other. This is true even though either reserves the right to terminate the relation before the end of the year. The Statute of Frauds of most states also requires that all contracts, pertaining to the sale of land, must be in writing in order to be good in the courts. Therefore a contract appointing an agent to make other contracts, having reference to the conveyance of land, must be in writing under the statutes.

In the Story Case, the defense of Bowers is not good, since to make the contract enforcible in the courts, it should have been put in writing, or Hansen should have had some written statement from Bowers acknowledging the contract. It will be well to note in this connection that the writing required by the statutes may be made at any time before the suit is actually brought; that the contract made by the parties is not void, but merely is incapable of being enforced in the courts, until the memorandum is produced. The purpose of these statutes is to prevent fraud and perjury, should it be required to prove the existence of such contracts from oral proof.