A case is not within the statute of frauds where the fair inference is that the leading object or purpose and the effect of the transaction was the purchase or acquisition of some property, lien or benefit which the purchaser did not before possess, but which enured to him by reason of his promise, so that the debt for which he is liable may fairly be deemed to be a debt of his own, contracted in such purchase or acquisition.
Defendant owner wanted a building project done by a certain date, but plaintiff subcontractor was reluctant to perform due to the general contractor's untimely payments. Defendant's agent orally agreed to pay the general contractor's obligation. Defendant found its agent conspired with the general contractor to defraud it and refused to pay. Plaintiff sued defendant for breach of its oral agreement and the jury found in favor of plaintiff. The trial judge denied the defendant's motions for a directed verdict, for judgment notwithstanding the verdict, and for a new trial. On appeal, the trial court's judgment was affirmed.
Is enforcement of the oral agreement barred by the Statute of Frauds?
The appellate court held the owner's promise was enforceable under the "leading object" exception to the statute of frauds, Mass. Gen. Laws ch. 259, § 1, because (1) the owner wanted to finish the project by a certain date for business reasons; (2) the work had to be done in a "tight time frame"; (3) the subcontractor was responsible for large parts of the work; (4) the subcontractor had done its preliminary work; and (5) the subcontractor was perhaps the only subcontractor able to do the work in the desired time, so the owner's promise - by one with apparent authority - was made to secure the subcontractor's continued and expedited performance and satisfying the general contractor's obligation was incidental. The subcontractor's promise to perform rather than repudiate any obligation to the general contractor was sufficient consideration.