Contracts – Statute of Frauds – Effect on Oral Exclusive Distributorship Agreement for Indefinite Duration

In 1935 plaintiff brewery made an oral agreement of no definite duration by which defendant and his father, as partners, were given the exclusive right to distribute its beer. Defendant, changing from one partnership to another, complied with various wishes of the plaintiff such as furnishing warehousing, purchasing uniform amounts of beer throughout the year although seasonal demands varied, dissolving the second partnership in 1950, discontinuing distribution of a rival beer in 1954, and hiring a sales promotion man in June 1954; the latter three actions taken on plaintiff’s assurance that he would continue defendant’s distributorship. In July 1954 plaintiff, without cause or notice, cancelled defendant’s franchise. Plaintiff then brought an action against defendant for the balance due on an open account for beer sold, and defendant, admitting this, counterclaimed for breach of contract. On appeal from a verdict and judgment for defendant on the counterclaim, held, reversed. Plaintiff was entitled to an instruction that if the jury found the parties impliedly agreed that the contract would continue for a reasonable time, then it must determine what period would constitute a reasonable time; if such time exceeded one year, the agreement would not be binding upon the plaintiff since it was not in writing. San Francisco Brewing Corp. v. Bowman, (Cal. App. 1958) 329 P. (2d) 349.