CONTRACTSStatute of Frauds

By: Seyvon Jones & Maxwell Mastellone

Company sued, claiming other party broke oral agreement to allow it to assume a debt owed by third party, if the second party would allow it to assume valuable business licenses previously held by third party. Appeals court held that, in Texas, statute of frauds did not apply in such instances.

Texas courts now have the main purpose doctrine, which removes an oral agreement to pay the debt of another from the statute of fraud.

We think that since they agreed to pay for their debts on a verbal contract they are now liable for whatever the amount they owed to whomever.

ower Entertainment, Inc. v. National Football League Properties, Inc., ---F.3d--- (1998 WL 472050)

or 151 F. 3d 247 (5th Cir., 1998)