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Supreme Court of the State of Hawaii - 469 P.2d 177, 52 Haw. 29
tl;dr:
A car salesman was fired after two and a half months despite an oral employment contract to last more than a year. Though the statute of frauds limits oral contracts to a year, the contract was enforceable because the salesman relied so heavily on it.Video Summary
Case Summary
In McIntosh v. Murphy (1970), the Hawaii Supreme Court addressed an employment contract dispute.
Dick McIntosh (plaintiff) sued his former employer George Murphy (defendant) to recover damages for breach of an alleged one-year oral employment contract.
Murphy was in southern California in March 1964 to interview candidates for management of his car dealership in Hawaii. McIntosh, one of the candidates, received an offer from Murphy over the phone on Saturday, April 25, 1964. McIntosh accepted, arrived in Hawaii the following day, and began work on Monday. After two and a half months, McIntosh was fired for poor performance.
McIntosh sued, alleging the oral employment contract was supposed to last for a year and that he was entitled to damages for the breach. The trial court ruled that the statute of frauds, which provides that oral contracts are enforceable only if they are performable within one year of formation, did not apply because McIntosh’s acceptance of the contract only occurred when he showed up for work on Monday, and the contract was to last for a year running from that Monday. Alternatively, the court ruled that if the contract was indeed accepted in the telephone conversation on Saturday and was to last for a year starting Monday, the statute of frauds still did not apply because the weekend days should not be counted.
The jury awarded McIntosh $12,103.40 in damages and the defendant appealed, maintaining that the alleged oral contract was not enforceable due to the statute of frauds. $12,103.40 in damages and the defendant appealed, maintaining that the alleged oral contract was not enforceable due to the statute of frauds.
On appeal, the court found in favor of McIntosh.
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The case involves a claim of breach of an alleged one-year oral employment contract by the plaintiff against his employer. The defense argues that the contract violates the Statute of Frauds due to the lack of a written memorandum. The trial court ruled that the contract did not fall under the Statute of Frauds because the employer accepted the plaintiff's performance as a form of acceptance, making the contract enforceable without a written agreement. The court also ruled that the remaining part of the weekend would not be counted in calculating the year, thus exempting the contract from the Statute of Frauds. The defendants appealed on the grounds of whether the plaintiff can maintain an action on the alleged oral employment contract in light of the Statute of Frauds. The court ruled that the time of acceptance of an offer is a question of fact for the jury, but the trial court decided that the intervening Sunday and part of Saturday would not be counted in computing the year for the purposes of the Statute of Frauds, even if the offer was accepted on a Saturday prior to the performance. The court based its decision on the doctrine of equitable estoppel, which operates to avoid unconscionable injury.
The dissenting opinion disagrees with the majority's decision to affirm the trial court's judgment regarding an alleged employment contract. The trial judge erred in ruling that the contract did not fall under the Statute of Frauds, and this error was prejudicial. The dissenting opinion argues that the majority's holding is flawed because it assumes that the defendant agreed to a one-year employment contract, which the defendant denies. The dissenting opinion questions the majority's decision to enforce the alleged contract based on the plaintiff's reliance, despite the defendant's denial and the Statute of Frauds. The dissenting opinion disagrees with the majority's suggestion that the court should use its equity powers to circumvent the Statute of Frauds if the defendant had agreed to a one-year employment contract. The judiciary's role is to interpret the law, not to enter into the legislative field.
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