South-Western Legal Studies in Business

Oral Agreement of Five Year Duration Unenforceable Due to Statute of Frauds
Description

Appeals court held that a contract involving the sale of a newspaper, that supposedly had an oral side agreement allowing the seller of the newspaper the right to buy it back in five years, was not enforceable under the statute of frauds.

Topic Contracts
Key Words

Oral Agreement; Breach of Contract; Statute of Frauds

C A S E   S U M M A R Y
Facts

The McCarthey family controlled the stock in the Kearns-Tribune (KT) Corporation. KT ran the Salt Lake City Tribune newspaper. The company TCI proposed that KT merge into TCI, which happened in 1997. The merger created a subsidiary, the Salt Lake Tribune Publishing Company (SLTPC), which would be run by the McCarthey family. Later, TCI merged with AT&T, which did not want to own a newspaper, and sold the paper to MediaNews in 2002. The McCartheys asserted that when KT merged with TCI in 1997, they were promised the right to buy the newspaper back in 2002. When the paper was sold to MediaNews instead, the McCartheys sued for breach of contract. The trial court dismissed the suit. The McCartheys appealed.

Decision

Affirmed. The oral agreement that supposedly granted the McCartheys the right to repurchase the newspaper after five years were superseded by the written contract that was executed at the time of the merger. The contract was very detailed as to all aspects of the merger and the operation of the newspaper and other assets. The statute of frauds bars enforcement of the supposed oral agreement. An oral agreement must be performed within one year. Hence, there is no right for the McCartheys to repurchase the paper.

Citation

MediaNews Group v. McCarthey, 494 F.3d 1254 (10th Cir., 2007)

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