Commercial Law - Contracts - Promissory Estoppel May Not Be Asserted to Avoid Statute of Frauds

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Authors
Peebles, John
Issue Date
1978
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Journal Article
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FIRST PARAGRAPH(S)|In Farmland Services Co-op v. Klein, the Nebraska Supreme Court held that the doctrine of promissory estoppel cannot be invoked to avoid the Statute of Frauds, except in a limited situation. In its holding, the court emphasized the continued importance of the Statute of Frauds and gave a restricted definition of promissory estoppel. The issue raised by the court-the relationship between promissory estoppel and the Statute of Frauds-is the subject of this note.|The seller orally agreed to sell 90,000 bushels of corn to the buyer. This agreement was an entirely oral transaction, with no confirming memorandum having been sent to the buyer. The trial court sustained the seller's motion for summary judgment, stating that the action was barred by the Statute of Frauds. On appeal, the buyer urged reversal, arguing that its cause of action was based on promissory estoppel. The buyer contended that promissory estoppel raised issues of fact and therefore precluded sustaining the motion for summary judgment. The court rejected the buyer's argument for three reasons. First, it found that to allow promissory estoppel to avoid the Statute of Frauds would render the Statute "meaningless and nugatory." Second, the court stated that section 2-201 of the Uniform Commercial Code contains no promissory estoppel exception to the Statute of Frauds. Finally, it held that promissory estoppel has traditionally been used to "supply" the element of consideration and is, therefore, limited to non-bargain transactions...
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11 Creighton L. Rev. 12 (1977-1978)
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Creighton University School of Law
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