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Statute of Frauds Bars Claim Under Software Agreement

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Plaintiff sued to enforce an agreement that would have terminated four software development agreements and resolved the parties' disputes thereunder. The agreement was not reduced to a writing signed by the Defendant. Since the agreement required a $400,000 payment several months after it was allegedly made, and then required Plaintiff to refrain from marketing certain software for one year after the payment, it could not possibly be performed within one year. Therefore, it was unenforceable under Michigan's statute of frauds, MCLA 566.132(1)(a).

In addition, the alleged agreement did not contain all of the essential terms. The letter relied upon by Plaintiff expressly stated that there was an issue as to the buy out price, an essential element. Therefore, the letter did not constitute a "contract to make a contract."

Pragma, Inc. v. Compuware Corp., Case No. 97-CV-72688-DT, March 31, 1988 (Hood, J.).
This article was prepared by Ronald S. Longhofer, a partner in our Litigation Department, and appeared in the July 1998 edition of the Michigan Bar Journal.

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