Can an employment contract that cannot be performed within one year be enforced if the only written evidence is an incomplete memorandum of terms signed by the defendant?

Nate Crabtree entered into employment negotiations with Elizabeth Arden Sales Corporation in September 1947 for a sales manager position. Crabtree initially requested a three-year contract at $25,000 per year. Elizabeth Arden countered with a two-year offer featuring a graduated salary structure: $20,000 for the first six months, $25,000 for the second six months, $30,000 for the second year, plus $5,000 annual expenses. This offer was documented on a telephone order blank. Crabtree accepted the terms via phone and telegram. A payroll change card was subsequently prepared detailing the salary terms.

After six months of employment, Crabtree received the scheduled salary increase. However, the company failed to implement the increase due after one year. As a result, Crabtree left his position and initiated legal action against Elizabeth Arden for breach of contract. The defendant company contested the existence of a two-year agreement and invoked the statute of frauds as a defense against enforcement of the alleged contract.

Crabtree (plaintiff) brought suit against the defendant regarding an agreement and a statute of frauds issue. The trial court ruled in favor of Crabtree on both matters and awarded damages of approximately $14,000. The defendant appealed this decision to the Appellate Division. The Appellate Division affirmed the trial court's ruling, though two justices dissented. Following this, the defendant further appealed the case, bringing it before the Court of Appeals of New York for review.

(Fuld, J.)

Yes. An employment contract that cannot be performed within one year can be enforced if multiple documents collectively satisfy the statute of frauds requirements, even if no single document contains all essential terms. The statute of frauds is satisfied when signed and unsigned writings clearly referring to the same subject matter or transaction are read together. This principle allows for a more flexible approach in determining compliance with the statute's writing requirement. The essential terms of the contract need not be contained in a single document, nor must every document be signed by the party to be charged. Instead, multiple related documents can be combined to establish the existence and terms of the agreement. Parol evidence is admissible to explain ambiguous terms and connect the various writings. This approach recognizes the realities of modern business practices where contract terms may be spread across multiple communications or documents. The key consideration is whether the writings, taken together, provide sufficient evidence of the agreement to satisfy the statute's purpose of preventing fraud and perjury. By allowing the combination of related documents, courts can enforce contracts that reflect the parties' true intentions while still adhering to the statute of frauds' fundamental requirements.