McIntosh v. Murphy
Citation: 52 Haw. 29 (1970)
Facts
Murphy orally agreed to employ McIntosh for one year. McIntosh moved from California to Hawaii to take the job. Murphy discharged McIntosh after about 2.5 months. McIntosh argued the employment contract was taken outside the Statute of Frauds by his reliance (moving from California).
Issue
Should promissory estoppel take the oral one-year employment contract outside the Statute of Frauds?
Holding
Yes. The Hawaii Supreme Court held that McIntosh’s substantial detrimental reliance — uprooting and moving across the ocean in reliance on the promised employment — justified enforcing the oral contract despite the Statute of Frauds.
Rule
Promissory estoppel and the Statute of Frauds: Where a party has reasonably and detrimentally relied on an oral promise that the Statute of Frauds would otherwise bar, a court may enforce the oral promise under promissory estoppel theory. The statute’s purpose — preventing fraud — is not served when a party has already made a major life change in reliance on the promise.
Significance
- Classic case for applying promissory estoppel to overcome the Statute of Frauds
- The “part performance” doctrine for real estate (where performance takes the case outside the SOF) has its analog in employment cases through promissory estoppel
- Restatement (Second) of Contracts § 139: a promise that the promisor should reasonably expect to induce reliance, and which does induce reliance, is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement
- Courts are split on whether promissory estoppel can routinely override the SOF or whether it applies only in extreme cases