Bradkin v. Leverton, 26 N.Y.2d 192 (1965)

When parties continue a business relationship beyond the expiration of an oral service contract that was initially for one year (but not performable within one year from its making), their conduct can be evidence of an implied agreement to renew the contract for another year, regardless of whether a conventional master-servant relationship exists.

Summary

Bradkin sued Leverton, alleging breach of an oral agreement where Bradkin was to act as Leverton’s exclusive export manager. The agreement, made in October/November 1957, was for one year beginning January 1, 1958, and allegedly continued on the same terms in 1959 and into 1960, until Leverton terminated it in April 1960. Leverton argued the agreement was unenforceable under the Statute of Frauds. The Court of Appeals held that the parties’ conduct in continuing the relationship beyond the initial year could imply a renewal of the contract, reversing the dismissal and remitting the case. The court emphasized that the implication of renewal is a matter of evidence, applicable beyond traditional master-servant relationships.

Facts

1. Bradkin, a corporation, acted as an export manager for manufacturers.
2. Leverton, a corporation, manufactured products for photographic and sound recording equipment.
3. In October/November 1957, Bradkin and Leverton made an oral agreement.
4. Bradkin was to be Leverton’s exclusive export manager (excluding the U.S. and Canada) for one year, beginning January 1, 1958.
5. Bradkin’s compensation was to be certain discounts on the prices of the exported items.
6. The relationship continued on the same terms during 1959 and into 1960 without an express agreement.
7. In April 1960, Leverton refused to allow Bradkin to continue as export manager.

Procedural History

1. Leverton moved for judgment on the pleadings, arguing the oral agreement violated the Statute of Frauds.
2. Special Term denied the motion, citing Adams v. Fitzpatrick, stating the Statute of Frauds doesn’t apply to fully performed contracts.
3. The Appellate Division reversed, stating the automatic renewal doctrine applies only to master-servant relationships.
4. Two dissenting Appellate Division Justices favored allowing Bradkin to amend the complaint with additional facts implying renewal.
5. The Court of Appeals reversed the Appellate Division’s decision, remitting the case to Special Term.

Issue(s)

1. Whether, for an oral agreement for one year of service unenforceable under the Statute of Frauds because the performance’s terminal date was more than a year after the agreement, the parties’ conduct in continuing the relationship beyond the agreed expiration date can be taken as proof of their intent to renew for another year?
2. If the answer to the first issue is “yes”, does the complaint fail to state a cause of action because the agreement did not create a conventional master-servant relationship?

Holding

1. Yes, because entering into a contract to run for a year, and then continuing to act as if its time had not run, is sufficient evidentiary support for a finding that the parties in fact intended to keep it alive for another year.
2. No, because the implication of an agreed renewal from the fact of continuance beyond a year should be available at least as to engagements like the one made between these parties for performance of services, regardless of the specific label.

Court’s Reasoning

The Court reasoned that while the Statute of Frauds typically bars enforcement of oral agreements not performable within one year, the doctrine does not apply when a contract is fully performed. The key issue was whether the continuation of the relationship beyond the initial year could imply a renewal of the agreement. The court acknowledged prior cases involved master-servant or landlord-tenant relationships, but stated that the rule allowing implication of renewal is based on evidence, not substantive law.

The Court stated, “Entering into a contract to run for a year, and then continuing to act as if its time had not run, is sufficient evidentiary support for a finding that the parties in fact intended to keep it alive for another year.”

The court emphasized that the plaintiff should be allowed to establish the intent to prolong the relationship through any relevant facts, including the parties’ continuation of the original arrangement without change. The defendant, of course, could present evidence to the contrary.

The dissenting judges in the Appellate Division believed amendment should have been allowed to add facts establishing an implied renewal.