05 April 2006

Form Over Substance In Kentucky

Usually, the statute of frauds requires certain contracts to be in writing. There are a number of exceptions to the rule. One is for partially performed contracts. Another is when the opposing party admits in his pleadings a term of the contract. The reason for excluding testimony about oral argeements supported by nothing but the statement, of course, is to prevent someone based solely on the biased testimony of someone who was a party to the contract and perhaps some of their friends regarding what was said. But, this rationale is problematic when the party who is alleged to have entered into the agreement says so on tape.

In a secretly recorded June 2001 conversation played at Sawyer's trial, Mills agreed to pay $1 million, plus $65,000 for a new car, over a series of payments lasting 10 years. . . . Last week, Judge James D. Ishmael said that the oral agreement is not legally enforceable because it was not in writing. His opinion, which dismissed the lawsuit, cited the Statute of Frauds, originally drafted in 1677 in England to prevent bogus oral contracts.

Sawyer's attorney, Michael J. Cox, disagrees. He is appealing the ruling.

Cox says that because Mills was capable of paying the bonus -- Mills allegedly received at least $22 million in attorneys fees, according to briefs filed by Sawyer's attorneys -- the oral agreement is enforceable.

More importantly, Sawyer fulfilled her part of the deal, Cox said.

It will be interesting to see what happens on appeal. The fact that this case got to trial means that the contract must have been denied in the Answer. Perhaps, this is an appropriate time to invoke a very serious sanction under Rule 11 or as a discovery sanction in this case.

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