The Law Office of Kurt H King

January 6, 2021

Oral Agreements Can Be Valid Contracts in Missouri

Missouri’s Statute of Frauds requires certain agreements/contracts to be in writing to be enforceable:

432.010.  Statute of frauds — contracts to be in writing. — No action shall be brought to charge any executor or administrator, upon any special promise to answer for any debt or damages out of his own estate, or to charge any person upon any special promise to answer for the debt, default or miscarriage of another person, or to charge any person upon any agreement made in consideration of marriage, or upon any contract made for the sale of lands, tenements, hereditaments, or an interest in or concerning them, or any lease thereof, for a longer time than one year, or upon any agreement that is not to be performed within one year from the making thereof, unless the agreement upon which the action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person by him thereto lawfully authorized, and no contract for the sale of lands made by an agent shall be binding upon the principal, unless such agent is authorized in writing to make said contract.

Fortunately, courts cut back the Statute by laying down several exceptions to its rule. Here are two exceptions that enable oral agreements to be binding contracts upheld in employment disputes by Missouri courts:

(1)   Full Performance–oral contracts are enforced where the plaintiff employee has fully performed since it is patently unjust to allow an employer to cry “no contract” after the employee has done his work for the employer. Koman v. Morrissey, 517 S.W.2d  929  (Mo. 1974) (concluding paragraph);

(2)  At Will Employment–An oral agreement of “at will” employment is an exception because both the employer and the employee have the right to terminate anytime, including within the one year. This exception applies even if the employment lasts longer than a yearKoman, supra; Null v. K & P Precast, Inc., 882 S.W.2d 705 (Mo. Ct. App. E.D. 1994).

Obviously, many workers hire on based on the employer’s spoken promise and a handshake–“you’re hired, be here Monday at 8 a.m., your pay is ‘x’.” Courts recognize this fact and make exceptions to the Statute of Frauds so that employees are paid in these situations. After all, Missouri law obligates the employer “to pay terminated employees for all wages, bonuses and/or commissions earned by the employee prior to the termination of the employment.”  Pratt v. Seventy-One Hawthorne Place, 106 S.W.3d 608 (Mo. Ct. App. W.D. 2003).

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068; 816.781.6000

Litigation, Employment Matters, General Practice

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