Opinion ID: 396498
Heading Depth: 1
Heading Rank: 3

Heading: the statute of frauds question

Text: 14 The most meritorious claim the appellants put before us is that enforcement of their agreement with Farrow is barred by the District of Columbia Statute of Frauds. The material portions of the Statute provide that: 15 An action may not be brought ... upon an agreement that is not to be performed within one year from the making thereof, unless the agreement upon which the action is brought, or a memorandum or note thereof, is in writing ... and signed by the party to be charged therewith or a person authorized by him. 23 16 The trial court found that the Memorandum Agreement was outside of the Statute for two reasons: first, because Farrow, the plaintiff, fully performed his side of the bargain; and second, because the contract was capable of performance within one year. 24 17 The appellants argue that the Statute bars enforcement against Cahill, who did not sign the Memorandum Agreement. 25 They contend Farrow's obligations under the agreement could not be performed within one year because one of his promises was to indemnify and hold harmless (Cahill and Kaswell) from all claims & liabilities of the firm not expressly assumed hereunder. 26 Claims against the firm might arise, the appellants point out, well after the passage of one year's time. Furthermore, the appellants argue that Farrow in fact did not fully perform his part of the agreement; they assert that mere part performance by a plaintiff is insufficient to take an agreement outside of the bar of the Statute. 18 Before analyzing this question, it is well to keep in mind what is not at issue here. The appellants do not contend on appeal they did not consent to the agreement between them and Farrow. Nor, apart from the Statute of Frauds question, do the appellants contend that the Memorandum Agreement did not become an effective contract because Cahill consented by his conduct and another member of the firm consented orally 27 rather than by signing the document. They do not argue that the clause of the agreement stating that it would become effective upon the consent of all present members of the firm should be read to mean that the written consent of each member of the firm was required. It is thus not disputed on this appeal that the Memorandum Agreement would be a valid oral contract. At issue here is solely whether enforcement of that contract is barred by the Statute of Frauds. 19 We find that it is not. We do not base our conclusion, as the trial court did, 28 on a finding that the agreement was outside the Statute or was later taken outside the Statute. Instead, we hold that even if the Statute does apply, the Memorandum Agreement satisfies it. We therefore do not decide the questions whether the contract was not within the Statute because it was susceptible of performance within a year 29 or whether the contract was taken out of the Statute by Farrow's performance. 30 We assume, but do not decide, that the contract was within the Statute. Our inquiry is directed solely to the question whether the requirements of the Statute were satisfied by the Memorandum Agreement. 20 The Memorandum Agreement appears to satisfy the Statute. It is undisputed that it embodies the terms of the contract and, as such, constitutes a suitable memorandum or note thereof. Furthermore, it is also signed by the party to be charged therewith or a person authorized by him, because Kaswell, who signed the document, was a partner in the new firm of Cahill and Kaswell and therefore an agent both of the partnership and of his partner. 31 There is no dispute that Kaswell had authority to negotiate and to authenticate the terms of the agreement. So it seems obvious that the Statute is fully satisfied by the Memorandum Agreement. 21 Nonetheless, it is worth noting possible confusions that might momentarily mislead one into questioning whether the situation is more complicated than this straightforward result suggests. These possible confusions arise because Kaswell signed the document before the contract came into being-before the consent of all the present members of the firm had been obtained-and because Kaswell's signature, while it authenticated the terms of the agreement, did not by itself constitute assent to those terms by the party to be charged. Indeed, the terms of the memorandum explicitly indicate that Kaswell did not have authority to give the partnership's assent to the contract; effective assent required the consent not only of Kaswell but also of Cahill. 22 Neither of these observations affects the result that the Statute of Frauds has been satisfied, however. The Statute does not require that the contract itself be in writing or that the signature of the party to be charged be affixed to the writing as the operative, legally effective act of assent. 32 The Statute attempts to provide a measure of protection against fraud but it stops well short of requiring that the contract itself be in writing. The Statute does not impose an additional requirement as to what constitutes a valid contract, 33 but only that certain enumerated contracts must be evidenced by a memorandum or note thereof ... signed by the party to be charged therewith or a person authorized by him. 23 For this reason, the memorandum or note required by the Statute need not be made by the parties as an expression of the contract or signed with the intention of assenting to the contract's terms in order to satisfy the Statute. The Statute is satisfied even by a letter which purports to repudiate or cancel an otherwise valid oral agreement, or which refuses to enter a written contract after an oral agreement was reached. 34 Generally, the purpose for which a memorandum was prepared and the intent with which it was signed are simply immaterial to determining whether the Statute has been satisfied. Thus, the fact that Kaswell did not and could not by his act of signing the Memorandum Agreement give his partnership's assent to the contract does not decide the sufficiency of the document in satisfying the Statute. 24 Nor does it matter that the document was prepared and signed prior to the time at which the contract became effective-the moment at which the consent of all the present members of the firm was obtained. It is well settled that a memorandum satisfying the Statute may be made before the contract is concluded. 35 For example, a written offer signed by the offeror is sufficient to satisfy the Statute in a suit against the offeror to enforce the agreement, even though the offeree subsequently accepted the offer only orally. 36 The written offer clearly authenticates the terms on which the offeror was willing to contract and that is sufficient to satisfy the Statute as a memorandum or note ... signed by the party to be charged therewith or a person authorized by him. 25 An attempt might be made to distinguish from the present case those in which written offers have been held sufficient to satisfy the Statute by pointing out that whereas an offeror has, by making the offer, expressed his consent to the terms of the offer, Kaswell was not empowered to bind his partnership by giving his assent at the time he signed the Memorandum Agreement. That is, in the case of a written offer the memorandum precedes the contract, but not the assent of the party to be charged; here the memorandum preceded both. This distinction, however, has little functional significance in preventing fraud. The fact that an offeror assented to the terms of his offer at the time of its dispatch does not imply that a contract ever was made, or if made, was made on the terms of the offer. An offeror who has dispatched a written offer by mail, for example, retains the power to withdraw his offer prior to its receipt and acceptance by the offeree. Moreover, the offeree may extinguish his power to accept by first rejecting the offer, or he may simply fail ever to accept it at all. Another possibility is that the offeree may orally make a counteroffer on different terms which are then accepted by the offeror. The law, however, considers none of these possibilities sufficient to provide grounds for rejecting the written offer as satisfaction of the Statute of Frauds. We can see little to distinguish the uncertainty concerning the terms and existence of a contract subsequent to the dispatch of a written offer from the uncertainty concerning the terms and existence of a contract subsequent to the execution of the Memorandum Agreement under the circumstances of the present case. 26 To reiterate the point: the Statute does not require the contract itself to be in writing. In the case of a written offer, the offeree, suing on the contract and entering into evidence the written offer in satisfaction of the Statute, continues to bear the burden of proving the existence of a contract on the terms contained in the document. Similarly in this case, Farrow, suing on his contract with Kaswell and Cahill and offering the written Memorandum Agreement in satisfaction of the Statute, bore the burden of independently proving the existence of a contract on the terms of the written document. In neither situation does the fact that the document offered in satisfaction of the Statute was created and signed prior to the time the contract was concluded affect its use in compliance with the Statute. 27 We find that the Memorandum Agreement satisfied the Statute of Frauds. There thus being no cause to reverse the judgment of the trial court, this case is therefore 28 Affirmed.