Which promises need a writing, and what counts as one

Fifth Avenue, New York, the twenty sixth of September, nineteen forty seven, six in the evening. Nate Crabtree wants to be sales manager for Elizabeth Arden's cosmetics company, and he wants a contract for a term, because he is leaving a secure job for a field he expects to take years to learn. He asks for three years. Miss Arden offers two, with a salary that steps up every six months.
He says the offer is interesting. She has her personal secretary write it down on the nearest piece of paper, a telephone order blank. Employment agreement with Nate Crabtree. Begin twenty thousand. Six months twenty five thousand. Six months thirty thousand. Five thousand per year expense money. And in brackets, two years to make good. Nobody signs it.
A few days later he accepts by telegram and she wires back her welcome. When he reports for work, a payroll change card is made up and initialled by the general manager, setting out the three salary steps. After six months he gets the first raise.
At the end of the year he does not get the second. The comptroller prepares another payroll card, signs it, and writes on it, salary increase per contractual arrangements with Miss Arden. She refuses to approve it. He leaves and sues.
So here is the question, and it is not whether there was a contract. The trial court found there was, for two years. The question is whether it can be enforced, because a contract that cannot be performed within a year must be evidenced by a writing signed by the party to be charged, and the only writing with the two year term on it was never signed by anyone. Think about it before I go on.
And now the question I keep asking. What exactly did these people promise each other? Two years of employment at a rising salary, and two years of work in return. The promises are clear. Today's module is about a different problem, a statute that says some promises, however clearly made, cannot be enforced unless the law can find them on paper.
Here is the first line for the board. The Statute of Frauds. Certain classes of contract are unenforceable unless there is a writing, signed by the party to be charged, that evidences the contract. The classes come from an English statute of sixteen seventy seven, and every American state still has most of them.
Contracts for the sale of an interest in land. Contracts that by their terms cannot be performed within one year. Promises to answer for another person's debt. Promises made in consideration of marriage. An executor's promise to pay the estate's debts from his own pocket. And, from Article Two, a sale of goods for five hundred dollars or more.
Second line. What counts as a writing. Not a formal contract. A note or memorandum, in the statute's words, which states the essential terms with reasonable certainty and is signed by the party against whom enforcement is sought. Signed means any mark made with intent to authenticate. Initials will do. An agent's signature will do. And, the point of today's case, the memorandum need not be a single document.
Third line, for goods. Section two two oh one. A contract for the sale of goods for the price of five hundred dollars or more is not enforceable unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought.
A writing is not insufficient because it omits or incorrectly states a term agreed upon. But the contract is not enforceable beyond the quantity of goods shown in such writing. For goods, the one term the writing must get right is quantity.
Now the case. Crabtree against Elizabeth Arden Sales Corporation, New York Court of Appeals, nineteen fifty three, Judge Fuld. Three papers. The unsigned telephone blank with the two year term. The first payroll card, initialled by the general manager, with the salary steps but no term. The second payroll card, signed by the comptroller, with the raise and the words per contractual arrangements with Miss Arden.
The court began with the two cards. Each of the two payroll cards unquestionably constitutes a memorandum under the statute. That they were not prepared or signed with the intention of evidencing the contract, or that they came into existence subsequent to its execution, is of no consequence. It is enough that they were signed with intent to authenticate the information contained therein and that such information does evidence the terms of the contract.
Those two writings contain all of the essential terms of the contract, the parties, the position, the salary, except the one that matters for the statute, the length of the employment. That term lived only on the unsigned telephone blank. So the question became whether the signed cards and the unsigned blank could be read together.
The statute of frauds does not require the memorandum to be in one document. It may be pieced together out of separate writings, connected with one another either expressly or by the internal evidence of subject matter and occasion. The hard case is the one before the court, where some writings are signed and others are not. Some states demand that the signed paper refer expressly to the unsigned one. New York chose the other view.
We now definitively adopt it, permitting the signed and unsigned writings to be read together, provided that they clearly refer to the same subject matter or transaction. And the safeguards. None of the terms of the contract are supplied by parol.
All of them must be set out in the various writings presented to the court, and at least one writing, the one establishing a contractual relationship between the parties, must bear the signature of the party to be charged, while the unsigned document must on its face refer to the same transaction as that set forth in the one that was signed.
Oral evidence is allowed for one purpose only, to connect the papers and to show that the party to be charged assented to the unsigned one. Here the three papers named the same parties, the same position, the same salary steps. It is hardly possible, the court said, that such detailed information could refer to another or a different agreement. And the comptroller's card spoke of contractual arrangements with Miss Arden, a reference of sorts to a more comprehensive arrangement.
Last, the term itself. Two years to make good. What purpose, other than to denote the length of the contract term, such a notation could have, is hard to imagine. Without it, the employment would be at will, and its inclusion may not be treated as meaningless or purposeless. Judgment for Crabtree affirmed, about fourteen thousand dollars.
Now the goods rule, with a farmer and a grain mill. St. Ansgar Mills against Streit, Supreme Court of Iowa, two thousand. On the first of July nineteen ninety six a hog farmer's father, who helped run the farm, telephoned the mill and ordered two lots of sixty thousand bushels of corn for delivery in December and the following May, as the family had done many times before.
The mill's practice was to write up a confirmation and have the father sign it when he came in to pay the monthly account. This time he did not come in until the tenth of August, and by then the price of corn had fallen hard. The farmer refused the corn.
The mill had a writing. The farmer had signed nothing. At common law that would end the case against him. Article Two has a special rule for merchants, which we reach in Lecture Twenty One, but the first requirement is the one for today.
Section two two oh one wants a writing sufficient to indicate that a contract for sale has been made, and it wants the quantity. The mill's confirmation had both. Whether it reached the farmer within a reasonable time, the court held, was a question for the jury, and it sent the case back.
Notice the shape of the Article Two writing. It need not state the price. It need not state the delivery date. It need not even get the terms right. It must show that a deal was made, it must be signed by the party being sued, or satisfied against him by one of the exceptions, and it fixes the ceiling on quantity. The common law asks for the essential terms. The Code asks for evidence of a bargain and a number.
Now let's change one fact. Miss Arden never signed anything, and the general manager's initials on the first payroll card are the only mark by anyone at the company. Does the memorandum satisfy the statute? Choose an answer before I go on.
Most people say no, because Miss Arden was the president and she did not sign. But the statute says signed by the party to be charged, and the party to be charged was the corporation. The corporation signs through its agents. Initials by the general manager, made with intent to authenticate the card, are a signature if he had authority to make them. The court treated the initialled card as a signed memorandum without hesitation. The question becomes authority, not ink.
Change one fact again. The telephone blank read, salary to be arranged, and the payroll cards did not exist. Choose.
Most people see it. An essential term is missing from every writing, and the statute will not let oral evidence supply it. None of the terms of the contract are supplied by parol, the court said. Oral testimony can connect papers and show assent. It cannot fill a blank. No sufficient memorandum, and the two year contract cannot be enforced, whatever was said in the room.
Change one fact a third time. Miss Arden offered, and Crabtree accepted, a contract for exactly one year. Choose.
This one is about the class, not the writing. A contract for exactly one year can be performed within a year of its making, if performance starts at once. It is outside the one year provision. No writing is required at all, and the telephone blank, signed or not, does not matter. Always ask first whether the contract is inside the statute. Only then ask about the paper.
Here is what people get wrong here, and why it is tempting. The first mistake is thinking the statute demands a formal contract. It demands evidence, a memorandum, which can be a telephone blank, a payroll card, a letter, or three of them read together. The second mistake is thinking both parties must sign. Only the party being sued must have signed, and the other side's signature is irrelevant.
The third mistake is forgetting the quantity rule for goods. A buyer sued on a writing that says one hundred units cannot be held for five hundred, however clearly the seller proves the larger deal. The writing sets the ceiling.
Here is the rule, in one breath.
A contract within the statute of frauds, land, the one year clause, suretyship, marriage, an executor's promise, or goods of five hundred dollars or more, is unenforceable without a writing signed by the party to be charged, but the writing may be informal, may be several papers read together if they plainly refer to the same transaction and one signed paper establishes the relationship, and for goods need only show that a contract was made and state the quantity. Now, five questions.