A lot of times, people will hear advice instructing them to “get it in writing” when it comes any sort of business promise they’ve received. That’s because there are far fewer situations where a written contract is unenforceable as compared to an oral agreement. While oral contracts are generally enforceable, there are circumstances where the law requires a written document in order for that agreement to be enforceable. This law is called the “Statute of Frauds” and it may be the key thing your skilled South Florida commercial litigation attorney can use to get the breach of contract case against your business thrown out.
The Florida Statute of Frauds lays out several circumstances in which, to have a valid and binding agreement, the parties are required to put their terms in writing. These scenarios include: real estate transaction contracts, agreements to pay a debt owed by another, lease agreements where the lease term extends for more than one year, contracts for the sale of goods valued at $500 or more and agreements that cannot be performed within a one-year time period.
That last circumstance — contracts that cannot be performed within one year — is one where that time restriction is a strict one, as a recent federal breach of contract case illustrates.
In that case, an online shopping business based in Miramar worked out a deal with a major furniture retailer in 2017. Representatives of the retailer met with the online business on Dec. 7, 2017, and re-affirmed “all the promotions, investment, and marketing [the retailer] wanted [the online seller] to invest in and run through the end of 2018.” None of these terms were reduced to writing.
The retailer ended the arrangement just a few months later, on Feb. 13, 2018. That led the online seller to sue for breach of contract.
The retailer, however, was able to get the seller’s case thrown out of court before trial. The reason was that the agreement upon which the seller relied was an oral one and, under the Statute of Frauds, it wasn’t enforceable.
The alleged oral contract in this case, which was established in 2017, dictated that completion would not occur until “the end of 2018.” That meant that, even using the Dec. 7 date, the duration was one year, three weeks and three days, meaning that the obligations could not be completed within one year and a written document was required.
The seller argued that it could have earned back all the money it invested in a period of less than one year, and since that period of time was less than one year, the statute didn’t apply. The appeals court, however, ruled that this was not how the Florida Statute of Frauds worked. The alleged contract clearly called for the agreement to run ”through the end of the 2018 calendar year.” That meant the contract “could not have been completed in less than a year and the statute of frauds applies.”
Whether you find yourself needing to sue someone for breach of contract or to defend against a claim of breach, rely on the experienced South Florida commercial litigation attorneys at Stok Kon + Braverman to provide you with the diligent and effect legal advocacy your business needs.
Contact us online or by calling (954) 237-1777 to schedule your consultation.