C. R. Klewin, Inc. v. Flagship Properties, Inc.

Supreme Court of Connecticut · 1991 · Contracts

ContractsStatute of Fraudsstatute of fraudsone-year provisionoral contractindefinite durationtime for performancepossibility of performance

Facts

Flagship, the developer of a large Connecticut project, discussed hiring Klewin as construction manager for the entire ConnTech Project. At a March 1986 meeting, the parties discussed a fee structure, shook hands, and publicly announced that they had a deal, but no specific terms or conditions regarding the duration of performance were conclusively established. The parties later entered a written agreement only for the first phase, Celeron Square, which was completed in October 1987. After Flagship replaced Klewin for later phases, Klewin sued alleging breach of an oral contract covering all phases, and Flagship argued that any such oral contract was unenforceable under the one-year provision of the statute of frauds because the overall project was expected to take three to ten years.

Issue

Whether under General Statutes § 52-550(a)(5) an oral contract that does not expressly state a time for performance is unenforceable when, as a practical matter, performance within one year is highly unlikely or realistically impossible. Put differently, does the one-year provision apply only when the contract's terms require performance to extend beyond one year, or also when the nature of the undertaking makes completion within a year improbable?

Rule

An oral contract is within the one-year provision of Connecticut's statute of frauds only if, by its terms, it cannot possibly be fully performed within one year from the making of the contract. If the contract contains no express term, directly or indirectly, regulating time so as to require performance beyond one year, it is treated as the functional equivalent of a contract of indefinite duration and is outside the statute, regardless of how unlikely completion within one year may be in practice.

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

In Hartford, Nora Vega orally agrees that Blue Elm Development will hire her firm to coordinate construction of a riverfront arts campus. The parties discuss that the project will probably take four years, but they never state any deadline or duration term in their agreement.

If Blue Elm later argues the oral agreement is unenforceable under the one-year provision of the statute of frauds, which is the best answer?

Explanation. The majority adopted a narrow rule: an oral contract falls within the one-year provision only if, by its terms, it cannot possibly be fully performed within one year from the making of the contract. Expectations, probabilities, and actual duration do not control. Because no express or inferable term here requires performance beyond one year, the agreement is treated as one of indefinite duration and is outside the statute.