Question

On July 5, 2000, Richard Price signed a written employment contract as a new salesman with the Mercury Supply Company. The contract was of indefinite duration and could be terminated by either party for any reason upon fifteen days’ notice. Between 2000 and 2008, Price was promoted several times. In 2005, Price was made vice president of sales. In September 2008, however, Price was told that his performance was not satisfactory and that if he did not improve he would be fired. In February 2011, Price received notice of termination. Price claims that in 2005 he entered into a valid oral employment contract with Mercury Supply Company wherein he was made vice president of sales for life or until he should retire. Is the alleged oral contract barred by the one-year provision of the statute of frauds?

Answer 1

An alleged oral employment contract promising a position for life is likely to be barred by the statute of frauds one-year provision because such contracts must be in writing to be enforceable if they cannot be completed within a year.

Step-by-step explanation:

The question queries whether an alleged oral contract which promises vice-presidential employment "for life or until retirement," made in 2005 is enforceable despite the statute of frauds, specifically its one-year provision, which necessitates certain contracts to be in writing to be legally enforceable.

Contracts that cannot be completed within one year of their making fall under the statute of frauds and generally must be in writing. The contract that Richard Price claims was established orally in 2005, promising him a permanent position as vice president for life or until retirement, would most likely be barred by the statute of frauds, since it is not capable of being completed within one year from the making of the contract.

Therefore, it would need to be in writing to be considered valid. However, enforceability could also depend on additional legal considerations such as the acknowledgment of the contract by the employer or partial performance by the employee.

Without a written contract to support Price's claim, his case for an enforceable lifetime employment contract is weak given the typical requirements of the statute of frauds.