Week 5 Case Study Assignment involving Statute of Frauds
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MEMORANDUM ON THE STATUTE OF FRAUDS
TO: Professor Scott Boykin
FROM: Jesus Emmanuel Jehovah RE: Module 5/Week 5 Assignment on the Statute of Frauds and Boone v. Coe
, 153 Ky. 233, 154 S.W. 900 (1913)
DATE: September 25, 2023 (extension granted)
QUESTIONS ANSWERED HEREIN
(1.)
What is the statute of frauds? (2.)
When does the statute of frauds apply in contract law generally?
(3.)
What policies is the statute of frauds designed to serve?
(4.)
How was the statute of frauds applied in Boone v. Coe
, 153 Ky. 233, 154 S.W. 900 (1913), and do you agree or disagree with such decision and, if so, why?
(5.)
Is there a moral basis for the statute of frauds doctrine?
SHORT ANSWERS
(1.) The statute of frauds is a statute that gives parties a waivable affirmative defense to claims against them involving certain types of contracts and which makes enforcement of such contingent on being written and signed by the person against whom enforcement is sought.
(2.) The statute of frauds generally applies in contract law when raised as a defense and the contract involves a type of promise covered by the statute, such as the sale of land or goods valued at more than $500 dollars or promises unperformable within one year.
(3.) The statute of frauds is primarily designed to serve policies of curtailing and protecting
people and courts from fraud and perjury related to unmade oral contracts, enhancing the reliability of evidence in court cases involving contracts covered by such statute, and promoting honesty, fair dealing, and certainty in significant contracts.
(4.) The statute of frauds was applied in Boone v. Coe
, 153 Ky. 233, 154 S.W. 900 (1913), to dismiss the plaintiffs’ breach of contract claims due to the alleged contract requiring performance longer than one year, not being in writing, not being signed by the defendant, and not complying with the statute of frauds. I agree with the court’s decision for reasons herein. (5.) There is a moral basis for the statute of frauds doctrine grounded in biblical commands of God, particularly Leviticus
19:11, and in legal principles exalting the truth and protecting people and courts from lies, perjury, and fraud.
FACTS
In Boone v. Coe
, 153 Ky. 233, 154 S.W. 900 (1913), the plaintiffs alleged they made an oral contract in Kentucky that provided that if they left Kentucky and went to work on the defendant’s Texas farm, the defendant would rent them his farm and would complete and provide them on arrival a dwelling and materials needed to live on and work the farm for one year, and that their one year lease and work would begin the day of their arrival. They traveled 55 days to the Texas farm, but the defendant did not complete or have ready the dwelling and refused to allow them to work or to occupy the house or premises. Plaintiffs returned to Kentucky in just 4 days, then filed a petition raising breach of contract claims and seeking damages for expenses and lost earnings in traveling to
and from Texas. The defendant demurred on statute of frauds grounds and the petition was dismissed. On plaintiffs’ appeal, such dismissal was affirmed.
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DISCUSSION
A.
The Statute of Frauds
The outcome of Boone
was based on the statute of frauds. Statutes of frauds exists in virtually all U.S. states in one form or another. See 72 Am. Jur. 2d, Statute of Frauds §1 (2023). While they can differ from state to state, they commonly preclude claims based on unwritten contracts that involve certain types of promises and require that contracts involving such types of promises be written and signed by the person against whom enforcement is sought. Michael B. Kelly, Inside Contract Law: What Matters and Why
§§1-D3 & 5-D (2011). The types of promises usually involve the sale or lease of land, promises in consideration of marriage, any promise that cannot be performed within one year, promises to pay someone else’s debt, an estate executor’s promise to pay the estate’s debts using the executor’s personal assets, and the sale of goods valued at over $500 dollars. Id
, Kelly, at §4-D1; 72 Am. Jur. 2d, Statute of Frauds §3. B.
When The Statute of Frauds Generally Applies in Contract Law
“The statute of frauds is an affirmative defense.” Wesdem, L.L.C. v. Ill. Tool Works, Inc.
, 70 F.4th 285, 294 (5th Cir. 2023). It only applies if a party asserts it to breach of contract claims and proves the validity of such defense. See, e.g., FRCVP Rule 8(c)(1).
1
Affirmative defenses generally must be properly and timely raised or are deemed waived. See 73 Am. Jur. 2d, Statute of Frauds § 439 (2023)(“Where the statute of frauds must be pleaded as an affirmative defense, a failure to do so acts as a waiver of the right to raise the statute as a defense.”). Even if properly raised, the defense only applies when the promises are of a type covered in the statute of frauds.
C.
The Policies the Statute of Frauds Is Designed to Serve
The statute of frauds is designed and intended to further many policies and interests. One of the main policies it is designed to serve “is to prevent the fraudulent enforcement of unmade contracts, not the legitimate enforcement of contracts that were in fact made.” Valentine v. Sugar Rock, Inc.
, 745 F.3d 729, 735 (4th Cir. 2014). Other policies it serves are to “ensure that the parties did in fact have an agreement," W. Silver Recycling, Inc. v. ProTrade Steel Co., LTD.
, 476 F. Supp. 3d 667, 679 & n.10 (M.D. Tenn. 2020); “promote certainty and to protect from frauds and perjuries,” French v. Bank of N.Y. Mellon
, 729 F.3d 17, 21 (1st Cir. 2013); and to “provide reliable evidence of the existence and the terms of [] contract[s],” guard against and “prevent frauds and perjuries by informing the public and judges of what is needed to form a contract,” and “encourag[e] parties to follow these requirements by nullifying those agreements that do not comply.” 72 Am. Jur. 2d, Statute of Frauds §2 (2023). These are all laudable policies.
D.
Applying The Statute of Frauds In Boone And Why I Agree With Such Decision
In Boone
, the defendant filed a demurrer raising the statute of frauds defense. The purported oral contract was formed in Kentucky and required traveling to Texas and travel time, plus a one-
year land lease upon arrival in Texas. As such, it was subject to Kentucky’s statute of frauds for being unperformable within one year, which is calculated “from the date of the contract, and not from the commencement of its performance.” Greenwood v. Strother
, 91 Ky. 482, 484, 16 S.W. 138,
139 (Ky. 1891). Because the plaintiffs did not produce a written contract with the defendant’s signature, and no benefit accrued to the defendant, the statute of frauds precluded enforcement and required dismissing their claims.
Id
, Boone
, 153 Ky. at 235-240. 1
Courts can sua sponte
raise unpled affirmative defenses, but only when the defense is apparent from a party’s filings. See, e.g., Wells v. Brown
, 58 F.4th 1347, 1356 (11th Cir. 2023). However, “before acting [
sua sponte
] on its own initiative, a court must accord the parties fair notice and an opportunity to present their positions.” Day v. McDonough
, 547 U.S. 198, 210 (2006)(bracketing supplied).
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The Boone
decision was proper and I agree with such. The purported contract was unperformable within one year and subject to the statute of frauds. “To satisfy Kentucky's statute of frauds, [there must be] one or more writings which together identify the parties to the lease, the property, and the [agreed upon lease terms]. At least one of those writings must also bear [the defendant’s] signature as the lessor.” Back v. Chesapeake Appalachia, L.L.C.
, 773 Fed. Appx. 294, 296 (6th Cir. 2019)(bracketing added). These requirements were not met in Boone
, and the purported contract seems fictitious and fraudulent for a few reasons. First, plaintiffs sought recovery
of expenses for and lost wages from travel, but travel to Texas took 55 days, while return travel took
4 days. Such travel time disparity suggests traveling to Texas was leisurely and not done per the contract, meaning any expenses and lost wages from travel to Texas were unrelated to performance and wrong to seek as relief. Second, the contract required the defendant to complete a dwelling to give them upon arrival, without indicating any agreed upon arrival date, and instantly completing a dwelling for a family on no notice seems impossible to perform and unconscionable to agree to. These things (while not irrefutable with other facts not disclosed in Boone
) suggest the purported contract in Boone
did not actually exist, underscoring the value of the statute of frauds in preventing
fraudulent claims based on unmade contracts.
E.
The Moral Basis For the Statute of Frauds Doctrine
Morality is biblically established by God’s eternal and immutable commands, all of which are oriented toward and exalt the truth.
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God commands that “[y]ou shall not steal; you shall not deal falsely; you shall not lie to one another.” Leviticus
19:11. Such Bible verse and many others express moral and spiritual value for the truth and prohibit lying, deceit, theft, and fraud. At their core, statutes of frauds are designed and intended to protect people and courts from lies, deceit, theft, and fraud, and are thus strongly based in biblical morality. They also “promote honesty and fair dealings,” Century BP, LLC v. Lakepointe Holdings II, LLC
, 2014 U.S. Dist. LEXIS 43324, *12
(D. Minn. 2014), and help “preserve the integrity of contractual agreements.” 72 Am. Jur. 2d, Statute of Frauds §2 (2023). These things promote and encourage integrity and sanctity in promise-
making and promise-keeping. Statutes of frauds help achieve these goals and are thus oriented toward exalting the truth and biblical morality.
CONCLUSION
Statutes of frauds provide affirmative defenses to certain kinds of contracts and serve important and laudable policy interests related to protecting people and courts from fraud and perjury related to unmade contracts. The Boone
decision involved a purported contract that was unperformable in one year and applying the statute of frauds to claims therein required dismissal due to there being no written contract signed by the defendant agreeing to the purported promises asserted by the plaintiffs. Such decision was proper under Kentucky law, and some aspects of Boone
suggest the purported contract in such case was fictitious and fraudulent, precisely the kind of contract the statute of frauds was designed to prevent enforcing. 2
Were morality determined by humans, everyone would have their own morals or lack thereof and many would adhere to or abandon such when expedient, which would result in individual and societal corruption and lawlessness and make civil society and government impossible. It would also make contracts impossible because a person’s morals or lack thereof could lead them to repudiate a contract after reaping its benefits without performance. These things would increase contract claims and benefit contract law attorneys, but harm people, society, and all attorneys and would unnecessarily add to burdens on the judiciary.
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