Twitter and other social media (but especially Twitter) are great places to find “hot takes” on everything and anything, and the Donald Trump-Stormy Daniels saga is no exception. I am going to look at a few hot takes on Ms. Daniels' claims that I saw on social media, and explain why they were off base. First up is the statute of frauds.
An early hot take was that Ms. Daniels was seeking to elude enforcement of the nondisclosure agreement by resort to the “statute of frauds.” This is wrong, but it is at least understandably wrong. The central fact that Ms. Daniels hangs her … um …. hat on is that Donald Trump did not sign the agreement. If you hear that the dispute involves an attempt to enforce a contract and one party didn’t sign, the statute of frauds is a logical place for your mind to go.
As Ms. Daniels’ Complaint makes clear, however, she is not relying on the statute of frauds, and with good reason. It wouldn’t work in this situation. Why? Well, first let’s understand what the statute of frauds is. It is a statute enacted by the state legislature defining certain categories of contracts that must be in writing to be enforceable, and moreover, must be signed by the person against whom the contract is sought to be enforced. Put simply, there are some transactions where, to avoid misunderstanding or later disputes, it is thought best to have the essential terms reduced to writing and acknowledged by the parties. As Kentucky’s former high court explained, “[t]he purpose of requiring a writing to evidence an agreement is to assure certainty of the essential terms thereof and to avoid controversy and litigation.” Walker v. Keith, Ky., 382 S.W.2d 198, 203 (1964). It should be noted that far from every transaction requires a writing. As the late comedian Mitch Hedberg famously observed, the purchase of a donut is one such transaction that does not.
Whether your transaction falls within the statue of frauds is no sure bet, even if you review the various categories of contracts listed. In Kentucky, for example, the question of whether a contract is capable of being performed within a year or not under KRS 371.010 has been litigated extensively - probably more than you would imagine.
But let’s assume the statute of frauds would apply to this transaction. Does the absence of Donald Trump’s signature implicate the statute of frauds and render the contract unenforceable? Not exactly. Well, actually, let’s make that just an unequivocal “no.” The problem is that Ms. Daniels’ objective is at cross-purposes with how the statute of frauds would apply. She is not trying to enforce the contract, she is trying to avoid enforcement of it. She signed the agreement, and therefore, the statute of frauds would certainly not preclude enforcement against her.
In writing? Check.
Signed by the person against whom enforcement is sought? Check.
Where the statute of frauds could come into play would be if Ms. Daniels attempted to enforce the confidentiality provisions against Donald Trump to keep him from disclosing their relationship (you just knew The Onion would go there). In that parallel universe, then Donald Trump may well be able to successfully assert the statute of frauds against Ms. Daniels’ attempt to enforce the agreement against him. But that is not the posture of this case. That's not to say that this reality (Mr. Trump not being bound) is irrelevant - in fact, this is pretty much what Ms. Daniels is arguing - that there was no meeting of the minds and no mutuality of obligation (she is bound by the agreement, but he is not).
One final note relating to the procedural set up here. I've been discussing what is in Ms.Daniels' complaint. But the statute of frauds is generally recognized as an affirmative defense to a claim attempting to enforce a contract. Thus, one may fairly ask, why would Ms. Daniels rely on the statute of frauds in her complaint? Remember that her complaint is one for a declaratory judgment. I may take this up in a later post, but in short, such a suit asks a court to declare the parties' rights under a given set of facts over which the parties are having a legal disagreement. This can, and often does, have the effect of scrambling the roles of the plaintiff and defendant. A declaratory judgment action plaintiff may be in the position of a defendant arguing that the statute of frauds precludes enforcement.
The important thing for those trying to understand the Daniels lawsuit is that Ms. Daniels is not relying on the statute of frauds, and it would be a mistake if she tried.