[ironryanis]

Why does the scenario below not require a written contract?

Question from MCQs

Sand orally promised Frost a $10,000 bonus, in addition to a monthly salary, if Frost would work two years for Sand. If Frost works for the two years, will the statute of frauds prevent Frost from collecting the bonus?

ANSWER: A

A.No, because Frost fully performed

B.No, because the contract did not involve an interest in real estate

C.Yes, because the contract could not be performed within one year

D.Yes, because the monthly salary was the consideration of the contract

The statute of frauds applies only to contracts for the sale of goods, a transfer of interest in land, promises to pay for the debts of another, or contracts that cannot be performed within one year. Consequently, the statute of frauds will not be considered in the performance of this contract.

Frost did fully perform and therefore a contract has been created. A contract contains an offer, acceptance of the offer, and valid consideration. Sand offered Frost a bonus, Frost agrees to work the two years (acceptance), and the $10,000 is the motivation or consideration for the contract.

AUD 91
FAR 80
BEC 79
REG 84

[Skynet]

One of the exceptions to the Statutes of Fraud is when the contract is fully performed by one party. Now if Frost has yet to perform then Yes the Statutes of Fraud applies because it can't be completed within one year. Since Frost has already fully performed and due to the Exception, Sand cannot go back and claim Statutes of Fraud because doing so would cause an unjust enrichment for Sand.

AUD - 90
BEC - 78
FAR - 84
REG - 87

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[ironryanis]

That makes sense. Thanks

AUD 91
FAR 80
BEC 79
REG 84

[Anonymous]

So just to clarify, this problem would not qualify for the statute of frauds because Sands' promise represents a Unilateral Contract and the one-year statute of frauds limitation only applies to Bilateral Contracts (promise for a promise)?

[Tux]

To Atlantic1984 –

I see this as a bilateral contract (a promise for a promise) –

one promises to pay money, the other promises to perform a service.

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
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Study resources:
Becker
Wiley test bank

[Lazer613]

Thanks for the explanation, Skynet. I was bothered by this question as well. Jeff (if you're listening), the explanation of this question should be rewritten to incorporate Skynet's point.

FAR - 75
AUD - 96
BEC - 89
REG - 97

[Author]

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