Generally, damages cannot be recovered for violation of a contract unenforceable under the statute of frauds. However, where services have been rendered during the life of another, on the promise that the person rendering the service should receive at the death of the person served a legacy, and the contract so made is within the statute of frauds, a reasonable compensation may be recovered for the services actually rendered. Also, the vendee of land under a parol contract is entitled to recover any portion of the purchase money he may have paid, and is also entitled to compensation for improvements, and under a contract for personal services within the statute, an action may be maintained on a quantum meruit. The doctrine of these cases proceeds upon the theory that the defendant has actually received some benefits from the acts of part performance, and the law, therefore, implies a promise to pay.
The parties' agreement provided that if the lessees would leave their homes and businesses in Kentucky, the lessor would furnish them with a house and the necessary materials to live on and cultivate the lessor's farm in Texas for the period of one year, commencing from the date the lessees arrived in Texas. The lessees agreed, but when they arrived in Texas, the lessor failed to have the house and materials ready and refused to grant the lessees access to the farm. The lessees brought an action for damages, and the circuit court entered judgment in favor of the lessor. The court determined that the lessees merely sustained a loss and that as the lessor received no benefit, there was no implied obligation on the lessor's part to pay for such loss.
Can plaintiffs recover for the lost time and incurred expenses based on their reliance on a contract that is unenforceable under the statute of frauds?
Plaintiffs merely sustained a loss. Defendant received no benefit. Had Defendant received a benefit, the law would imply an obligation to pay therefor. Having received no benefit, no obligation to pay is implied. The statute of frauds says that the contract of defendant made with plaintiffs is unenforceable. Defendant, therefore, had the legal right to decline to carry it out. To require him to pay plaintiffs for losses and expenses incurred on the faith of the contract without any benefit accruing to him would, in effect, uphold a contract upon which the statute expressly declares no action shall be brought. The statute was enacted for the purpose of preventing frauds and perjuries. That it is a valuable statute is shown by the fact that similar statutes are in force in practically all, if not all, of the states of the union. Being a valuable statute, the purpose of the law-makers in its enactment should not be defeated by permitting recoveries in cases to which its provisions were intended to apply.