Scheck v. Francis, 26 N.Y.2d 466 (1970)

An agreement is not binding if the parties do not intend to be bound until it is reduced to writing and signed by both of them, and a letter of transmittal for unsigned contracts does not satisfy the Statute of Frauds if it lacks language indicating a present intent to be bound.

Summary

George Scheck, Connie Francis’s former manager, sued Francis and her corporations for breach of employment agreements. The agreements, although signed by Scheck, were never signed by Francis. Scheck argued that the agreements and a cover letter from the defendants’ attorney constituted a sufficient memorandum under the Statute of Frauds. The court held that the Statute of Frauds barred the claim because the letter did not establish a contractual relationship or indicate an intent to be bound until both parties signed the agreements.

Facts

George Scheck managed Connie Francis for many years. After the expiration of a previous employment agreement, they negotiated new contracts in February 1968. The defendants’ attorney, Marvin Levin, sent four proposed agreements in quadruplicate to Scheck with a cover letter dated April 15, 1968, instructing Scheck to sign all copies and have Connie Francis sign them. Scheck signed promptly, but Francis never signed. He continued to work for the defendants until August 12, 1968, when he was told not to negotiate further for Francis’s services unless she notified him in writing. In March 1969, Scheck was informed that no contracts existed between him and Francis, leading to his lawsuit for damages.

Procedural History

The trial court dismissed Scheck’s complaint, finding it barred by the Statute of Frauds. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal.

Issue(s)

Whether the unsigned agreements, coupled with the attorney’s covering letter, constituted a sufficient memorandum to satisfy the Statute of Frauds, thereby creating an enforceable contract even without Francis’s signature.

Holding

No, because the writings evidenced the parties’ intention not to be bound until the agreements were signed by both parties, and the attorney’s letter did not serve to establish a contractual relationship.

Court’s Reasoning

The court reasoned that parties are not bound by an agreement until it is reduced to writing and signed by both, if that is their intent. The court distinguished this case from Crabtree v. Elizabeth Arden Sales Corp., which held that a memorandum satisfying the Statute of Frauds could be pieced together from separate writings if they clearly referred to the same subject matter and at least one writing was signed by the party to be charged. Here, Levin’s letter was merely a transmittal for unsigned contracts and lacked “in praesenti language.” The court emphasized that “the letter drafted by defendants’ attorney, as stated on its face, was intended merely as a means of transmittal to the plaintiff of unexecuted contracts.” The court noted that the letter did not establish a contractual relationship, authenticate any information in the unsigned contracts, or indicate an intent to bring a contract into existence. It was merely a step in negotiations. The court concluded that the parties understood the agreements would take effect only after both had signed, and until then, the matter remained in the negotiation stage. The court found that where writings are plainly insufficient on their face, as in this case, they do not satisfy the Statute of Frauds. The court stated that where it is clear from the writings themselves that they do not constitute a memorandum sufficient to satisfy the statute, it is “immaterial” whether or not they “accurately reflect and contain all of the pertinent terms of a prior alleged oral agreement…which does not purport to be authenticated by any signature of the defendants or their agent.”