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Ohanian v. Avis Rent A Car System, Inc. - 779 F.2d 101, 1985 U.S. App. LEXIS 25456, 121 L.R.R.M. 2169, 105 Lab. Cas. (CCH) P55,604, 1 I.E.R. Cas. (BNA) 1102, 19 Fed. R. Evid. Serv. (Callaghan) 1106

Rule:

The one-year provision in the statute of frauds does not preclude an oral contract unless there is not the slightest possibility that it can be fully performed within one year. The question is not what the probable, or expected, or actual performance of the contract was; but whether the contract, according to the reasonable interpretation of its terms, required that it could not be performed within the year. Courts analyze oral agreements to determine if, according to the parties' terms, there might be any possible means of performance within one year.

Facts:

Plaintiff Robert Ohanian began working for defendant Avis Rent A Car System (Avis) in 1937. Due to his excellent performance, Ohanian moved up the ranks and was even orally promised a lifetime employment contract. Unbeknownst to Ohanian, he signed a relocation expense plan which contained a provision that either he or Avis can terminate his employment at will. A month later, Ohanian was fired without severance pay. Thereafter, Ohanian instituted an action against Avis, contending that the latter breached a lifetime employment contract made orally to him. The jury found for Ohanian and he was consequently awarded $23,100 in bonuses and moving expenses that did not depend on the oral contract. On appeal, Avis argued that the alleged oral contract was barred by the statute of frauds, was inadmissible under the parole evidence rule and, in any event, that the evidence adduced was insufficient to establish a promise of lifetime employment.

Issue:

Was an oral contract barred by the statute of frauds? 

Answer:

No.

Conclusion:

The Court held that the statute of frauds did not bar the oral employment contract; accordingly, the Court ruled that the jury properly arrived their finding of a promise for lifetime employment based upon the evidence. As such, the Court determined that there was no basis for a new trial as to damages.

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