Harriman v. United Dominion Industries, Inc.

Supreme Court of South Dakota · 2005 · Corporations

693 N.W.2d 44 (2005)

Updated August 22, 2026

CorporationsStatute of FraudsJoint VentureEmployment Contractsoral contractpermanent employmentduration termwriting requirement

Facts

Harriman and Feterl Manufacturing entered into an oral agreement in 1988 under which Feterl would manufacture service bodies and Harriman would develop and sell them for commissions. The parties never discussed or reduced to writing the duration of the agreement, although some records reflected the commission structure. Harriman worked from 1988 to 1997 and continued through later corporate changes until UDI altered his commission structure, after which he resigned in 2000. Harriman sued, alleging among other things breach of a permanent employment contract and the existence of a joint venture.

Issue

Whether Harriman's oral contract claim was barred by SDCL 53-8-2(1) because the agreement, as intended by the parties, was not to be performed within one year and lacked a signed writing containing the duration term. Also, whether the jury was properly instructed that all six elements of a joint venture must exist.

Rule

Under SDCL 53-8-2(1), a contract is unenforceable unless memorialized in a writing subscribed by the party to be charged when the agreement by its terms is not to be performed within one year from its making. In South Dakota, all six listed elements of a joint venture must be met to establish the existence of a joint venture.

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

In Sioux Falls, Nora Benson orally agreed to develop a new equipment line for Prairie Forge Systems, a fictional manufacturer, in exchange for commissions on each sale. The parties never discussed duration, but Nora later testified the arrangement was expected to continue until she retired or until the product line stopped making money.

If Prairie Forge terminates Nora after three years and she sues for breach, which is the strongest argument under the governing rule?

Explanation. An oral agreement is unenforceable if by its terms it was not to be performed within one year, unless there is a writing subscribed by the party to be charged. Where the parties did not discuss duration but the claimant's own theory is that the arrangement would last until retirement or until profitability ended, the intended duration exceeds one year. Writings showing compensation alone do not satisfy the requirement if they do not include duration.