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The statute of frauds is not applicable to an agreement the performance of which depends on a contingency which may or may not happen within one year.
Defendant debtors informed the plaintiff lender that they could not afford to pay their daughter's college tuition. The lender orally agreed to pay the tuition in exchange for the debtors' express promise to repay the amounts on demand. The debtors refused to repay the loan, and the lender commenced an action alleging a breach of the oral agreement to repay the tuition advances and that the debtors were unjustly enriched at the lender's expense. The debtors brought a motion to dismiss the action. The trial court granted the motion to dismiss, holding that the action was barred by the statute of frauds, and the lender appealed.
Under the circumstances, was the plaintiff’s action barred by the statute of frauds?
The court modified the order by denying the motion to dismiss, ruling that nothing in the oral agreement set the duration of the lender's obligation to pay the tuition. The court concluded that there was no guarantee that the debtors' daughter would remain in college for four years and that the statute of frauds was not applicable to an agreement the performance of which depended on a contingency which could or could not happen within one year.