The existence of an enforceable contract is not a necessary precondition to recovery under either quantum meruit or promissory estoppel doctrines. Whether an agreement obnoxious to the Statute of Frauds is void or merely unenforceable, one who has partly performed the agreement and who is not in default in continuing performance should be compensated for any benefit which he has furnished the other party if the latter refuses to perform.
Appellant management corporation entered into an oral contract under which it would operate as a construction manager for appellee development corporations. Appellees filed a motion for summary judgment alleging that any contract was unenforceable under the statute of frauds. The district court held that because no enforceable contract existed, appellant was not entitled to compensation for preconstruction services performed pursuant to the unenforceable contract. On review, the court reversed and remanded the case.
Does the Statute of Frauds render the oral contract unenforceable?
The court found that the oral contract fell outside of the statute of frauds because an oral contract that failed to state that performance was to have a specific duration beyond one year was, as a matter of law, the functional equivalent of a contract of indefinite duration for the purposes of the statute of frauds and thus, outside the proscriptive force of the statute. Additionally, the district court erred by engaging in factfinding in accessing construction management services, which was inappropriate on summary judgment.