Allied Corporation in Boston offers a job to Carol, who lives in Denver. Carol orally agrees to work for Allied for two years. She moves her family to Boston and begins work. Three months later, she is fired for no stated cause. She files a suit against Allied for reinstatement or pay. Allied pleads the lack of a written contract. In whose favor is the court likely to rule, and why?

Question

What will be an ideal response?

Answer 1

The court might conclude that under the doctrine of promissory estoppel, the employer is estopped from claiming the lack of a written contract as a defense. This oral contract may be enforced because the employer made a promise on which the employee justifiably relied in moving, the reliance was foreseeable, and injustice can be avoided only by enforcing the promise. If the court strictly enforces the Statute of Frauds, however, the employee may be without a remedy because a contract that cannot be performed within one year from the day after its making must be in writing to be enforceable.