C. R. Klewin, Inc. v. Flagship Properties, Inc.

Facts

Klewin was a Connecticut-based corporation that provided general construction contracting and construction management services. Flagship Properties and DKM Properties were real estate developers located outside Connecticut that did business together in Connecticut as Conn-Tech. Flagship became the developer of the ConnTech Project in Mansfield. The master plan called for twenty industrial buildings, a 280 room hotel and convention center, and housing for 592 graduate students and professors, at an estimated total cost of $120 million. In March, 1986, representatives of the two companies met for dinner to discuss Klewin serving as construction manager. Klewin said its fee would be 4 percent of the cost of construction plus 4 percent for overhead and profit, subject to change depending on when the phases were built. The meeting ended with a handshake and Flagship's representative saying, “You’ve got the job. We’ve got a deal.” No other specific terms were conclusively established at trial. The parties held a videotaped press conference and signed a standard form of agreement without filling in any blanks. Construction of the first phase, Celeron Square, began May 4, 1987, under a written agreement covering that phase alone, and it was finished by the middle of October, 1987. Flagship had become dissatisfied with Klewin's work. In March, 1988, it contracted with another contractor to perform the sitework for Celeron Square II, the next phase.

Issues

1. Under the one-year provision of the Connecticut statute of frauds, is an oral contract that does not explicitly state its time for performance a contract of indefinite duration, and so outside the statute?
2. Is an oral contract unenforceable when its method of performance contemplates completion over a period longer than one year, but the contract does not explicitly rule out performance within one year?

Holding

An oral contract that does not state in express terms that performance is to have a specific duration beyond one year is, as a matter of law, treated as a contract of indefinite duration for the purposes of the statute of frauds. It is enforceable even if full performance will realistically take longer than a year.