Burkle v. Superflow Mfg. Co.

Supreme Court of Connecticut · 1950 · Contracts

ContractsStatute of FraudsContracts not performable within one yearQuantum meruitoral contractStatute of Fraudsone-year provisionindefinite duration

Facts

The defendant orally agreed with the plaintiff partnership, which acted as sales agents or brokers, that for an unspecified time the plaintiffs would solicit orders for several plumbing items, the defendant would deliver all orders procured by them within thirty days, and the defendant would pay a 10 percent commission on all orders procured. The plaintiffs greatly expanded their sales efforts and obtained orders totaling $171,883.20, but the defendant delivered only $9,867.10 worth of goods and paid commissions only on the orders filled. The defendant accepted all but two of the orders and, according to the finding, could have obtained castings or purchased many items ready-made and had adequate materials and equipment to fill many more orders than it did. The trial court held the oral contract valid and awarded commissions on orders obtained before July 1, 1946, but the defendant argued that the agreement was unenforceable under the Statute of Frauds.

Issue

Whether an oral agreement of indefinite duration under which a partnership would continue soliciting orders and the defendant would pay commissions on all such orders was unenforceable under the Statute of Frauds as an agreement not to be performed within one year. If so, whether the plaintiffs could nonetheless recover for services rendered and accepted.

Rule

Under Connecticut's one-year Statute of Frauds, an oral agreement is unenforceable unless written if its terms are so drawn that it cannot by any possibility be fully performed within one year. A contract of indefinite duration is not outside the statute merely because it may be terminated within a year by breach, mutual rescission, cessation of business, or the possible death of multiple partners; only true full performance within a year counts. Part performance does not remove such a contract from the one-year provision, but full performance by one party does, and a party whose accepted services were rendered under an unenforceable contract may recover their reasonable value.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Cleveland, Orion Valve Works orally agrees with Lakeside Sales Group, a two-person brokerage partnership, that Lakeside will keep soliciting orders for Orion's fittings for an unspecified future period and Orion will pay an 8% commission on all orders Lakeside obtains. After nine months, Orion refuses to honor the arrangement and argues the oral agreement is unenforceable.

Is the oral agreement most likely within the one-year Statute of Frauds?

Explanation. The majority rule is that an oral contract falls within the one-year provision if its terms are so drawn that it cannot by any possibility be fully performed within one year. An agreement requiring a brokerage partnership to continue soliciting orders for an unspecified and indeterminable future period, with commissions due on all such orders, is not fully performable within a year merely because it is indefinite. The later refusal to continue is termination by breach, not performance. (Derived from Burkle v. Superflow Mfg. Co. (n.d.).)