Business Law: Case Study Paper Example

3 pages
553 words
Sewanee University of the South
Type of paper: 
Case study
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Statute of Frauds Under Statute of Frauds, oral contracts are enforceable. While the provisions of the Statute of Frauds may differ state to state, there are some exceptions where the contract has to be written to be binding. There are six categories of such agreements. If an agreement falls under one of these five categories, the contract is within the statute and must be in writing. If otherwise, the contract is outside the statute and need not be in writing. The five categories of contracts that must be in writing are;

Contracts that cannot be performed within one year of the contract

Contracts of suretyship in paying a debt.

Contracts for the sale of goods.

Contract for the sale of an interest land

Contracts in consideration of marriage

In our case study, the oral contract between Wombat and Tony is enforceable under the Statute of Frauds. This is because the verbal contract which causes Wombat to quit his job and move his family does not fall under any of the five categories required by the Statute to in written to be enforceable. Additionally, Wombat fully complied with the terms of the contract as he did quit his job and move his family. Under the Statute of Frauds, if a plaintiff suffers some detriment because of relying on the defendants promise, the oral contract is enforceable. Therefore, in this case, Wombat should recover damages caused to him by Tony in their contract.

Despite the popular belief that oral contracts are enforceable, the only law that allows such contracts to be admissible is the Statute of Frauds. However, this provision has many exceptions as pointed out earlier. Oral agreements can also be enforced in a court as long as there is enough evidence primarily a third party involved when the contract is being made. Under this provision, if there was a witness when Wombat and Tony entered into the oral agreement, he should recover damages from Tonys Toy Company. Notably, there are no other provisions which allow for oral contracts except the Statute of Frauds. Oral agreements are the not in the best interest of the parties involved as they result to he said she said battles. Wombat should know that contract law does not favor oral contracts. So the next time he makes an agreement, he ought to put it in writing.

In this case study, several ethical issues can be discussed especially in regard to Tonys promises. The first issue affects terms and conditions of employment. Though this issue is addressed, the only provision by Tony is that he will hire Wombat for three years. There are so many things falling under terms and conditions in an employment contract. For instance, Wombat should have enquired of the consequences of Tony terminating the contract before the three years are over. The best way to avoid dilemmas like the one Tony puts Wombat in is to discuss the contract's term and conditions clearly. A second issue is unfair treatment of employees by Tony. In an employment contract, it is required that the employer should give the employee a notice of termination of the employment within a specified period of time. Even though the two entered into an oral contract, it is binding as a written contract. Therefore, Tony ought to have given Wombat a notice before firing him.

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