McIntosh v. Murphy – Case Brief
McIntosh v. Murphy, 52 Haw. 29, 469 P.2d 177 (Haw. 1970).
Facts: Murphy (D) made a verbal agreement to hire McIntosh (P) to work at his auto dealership for one year. The agreement was never put into writing. McIntosh later sent Murphy a telegram stating that he would arrive in Honolulu the next day from Los Angeles. P began work the next day. D fired him two months later.
P sued for damages and claimed that the contract was for one year. D claimed that the contract violated the Statute of Frauds and was therefore void. D’s motion for a directed verdict was denied. The jury verdict was for P and D appealed.
Issue: Can an oral promise be removed from the Statute of Frauds and held to be enforceable, if the promise is one which the promissor should reasonably expect to induce either action or forbearance on the part of the promisee?
Holding and Rule (Levinson): An oral promise which the promissor should reasonably expect to induce either action or forbearance on the part of the promisee is enforceable when injustice can be avoided only by enforcing the contract. See Restatement (Second) of Contracts § 217A. The court held that if a party has relied on an oral promise and rendered part performance the other party should be estopped from asserting the Statute of Frauds.
Dissent (Abe): This ruling usurps the power of the legislature to amend or repeal the Statute of Frauds.
Notes: This case provides an example of the use of promissory estoppel to render enforceable a contract that would otherwise fall within the Statute of Frauds. Promissory estoppel is not being used in this case as a “consideration substitute”.