16-1b Agreements That Cannot Be Performed within One Year

Contracts that cannot be performed within one year are unenforceable unless they are in
writing.This one-year period begins on the date the parties make the agreement. The critical
word here is “cannot.” If a contract could possibly be completed within one year, it need not be
in writing. Betty gets a job at Burger Brain, throwing fries in oil. Her boss tells her she can have
Fridays off for as long as she works there. That oral contract is enforceable whether Betty stays
one week or 20 years. “As long as she works there” could last for less than one year. Betty
might quit the job after six months. Therefore, it does not need to be in writing.
If an agreement will necessarily take longer than one year to finish, it must be in writing to be
enforceable. If Betty is hired for a term of three years as manager of Burger Brain, the
agreement is unenforceable unless put in writing. She cannot perform three years of work in
one year.

Or, if you hire a band to play at your wedding 15 months from today, the agreement must be in
writing. The gig may take only a single day, but that day will definitely not fall in the next 12
months.
The following case picks up the story of Lynn and Howard, the warring couple from the chapter
opener. Who wants to be a millionaire? They both do. Who will win? Only one of them.

Browning v. Poirier
165 So.3d 663 Florida Supreme Court, 2015

Facts: As introduced in the chapter opener, Howard Browning and Lynn Poirier were romantic
partners. Early on, they promised to share any lottery winnings equally. Fourteen years after
that oral promise, Poirier purchased a winning ticket and collected one million dollars. She
refused to give Browning half.
Browning sued Poirier for breach of oral contract. Poirier claimed that the oral agreement was
unenforceable because the Statute of Frauds requires promises that are not performable within
a year to be in writing. The lower court found in her favor and the appeals court affirmed.
Browning appealed to the state supreme court.

What is the statute of frauds and how is it being used in this case?
The statute of frauds requires certain agreements to be in writing to be enforceable. One of the
required agreements that is required to be in writing are those agreements that cannot be
performed in one year. The defendant is Poirier is using the statute of frauds as a defense. She
is arguing that this particular oral agreement needed a writing to be enforceable against her
because it was not able to be performed within one year.

How did the trial and appellate court decide?

They both found that this agreement falls under the statute of frauds and was required to be in
writing to be enforceable.
Issue: Is an oral agreement of indefinite duration to share future lottery winnings enforceable?
Excerpts from Justice Polston’s Decision: It is well settled that the oral contracts made
unenforceable by the statute because they are not to be performed within a year include only
those which cannot be performed within that period. A promise which is not likely to be
performed within a year, and which in fact is not performed within a year, is not within the
statute if at the time the contract is made there is a possibility in law and in fact that full
performance such as the parties intended may be completed before the expiration of a year.
Stated otherwise, judging from the time the oral contract of indefinite duration is made, if the
contract’s full performance is possible within one year from the inception of the contract, then it
falls outside the statute of frauds.
In this case, the oral agreement between Browning and Poirier is one of indefinite duration
because no definite time was fixed by the parties for the performance of their agreement.
Additionally, at the time the contract was made there is a possibility in law and in fact that full
performance of the agreement between Browning and Poirier could have been completed
before the expiration of a year. For example, if Browning or Poirier purchased a winning lottery
ticket and they split the proceeds before the expiration of one year, the agreement would have
been fully performed before the expiration of one year. Alternatively, either Browning or Poirier
could have ended the agreement at any time. Accordingly, judging from the time the oral
contract was made, nothing in the terms of their contract demonstrates that it could not be
performed within one year.
Because the oral agreement between Browning and Poirier could have possibly been performed
within one year, it falls outside the statute of frauds.

How did The Supreme Court of Pennsylvania apply the statute of frauds and how did The Court
decide?

The Court found that this oral agreement could be performed in one year and therefore falls
outside of the statute of frauds and was not required to be in writing to be enforceable. The
appellate court is reversed.

Case Application Questions: Browning v. Poirier

Because their oral agreement was outside the Statute of Frauds, it was enforceable and Lynn
had to pay Howard. But suppose that Lynn and Howard had agreed their deal would last two
years. In that case, the oral promise would not be enforced because a two-year agreement
cannot be performed in one year. Lynn would walk away with the million-dollar prize.

Ethics
A promise is a promise … right? The purpose of the Statute of Frauds is to give proof of certain
promises. Perhaps we need such a rule because people have a tendency to forget, rewrite
history, or go back on their word. For example, it is common for family, friends, or coworkers to
buy lottery tickets together with the understanding that they will share winnings. But many court
cases like Browning v. Poirier tell the sad tale of relationships ruined by lottery pools. What
result in these cases if you applied the Ethics Theories from Chapter 2? What Ethics Traps
might be at play? Even if the law did not require it, what is the right thing for Lynn to do? Would
you share your winnings with another? Under what circumstances?