contract-law england-and-wales
How can an un-enforce-able contract still be valid?
<p>I don't understand how a contract can be UN-enforce-able, but still valid? Doesn't &quot;uN-enforce-able&quot; mean &quot;invalid&quot;?</p>
<p>Presuppose that <a href="https://www.brookings.edu/blog/techtank/2015/11/09/why-doctors-still-dont-text-or-email-their-patients/" rel="nofollow noreferrer">your surgeon doesn't email with patients</a>,  you formed an oral contract with the Dr perfectly, and you recorded it as a WAV audio file. Indubitably it's a valid contract, and evidenced electronically or digitally – but not in writing. But if the audio file is un-enforce-able, then your WAV file is useless!</p>
<blockquote>
<p>As we have already seen in Chapter 1,1 the general principle is that contracts may be made
entirely orally, no matter how valuable or important the subject matter of the contract may
be. However, there are some exceptions to the general rule that no written formalities are
required, and this chapter will examine two classes of contract. The first encompasses particular
categories of contract which must be in writing as a result of legislation. The second
concerns certain types of contract which are not enforceable unless evidenced in writing.
It should be noted straight away that there are important differences between the two classes.
As regards the first, the ‘contract’ will be void if not in writing. But as regards the second class
of contract, <strong>any contract will be valid but simply unenforceable</strong> if not evidenced in writing.
This means that, where a contract is made orally, neither party can sue on it unless and until
a party can produce the appropriate written evidence of it. Such evidence may come into
existence after the contract has been made.</p>
</blockquote>
<p><em>JC Smith's The Law of Contract</em> 2021 3 ed, p 115.</p>

<p>Wiipedia says -</p>
<blockquote>
<p>An unenforceable contract or transaction is one that is valid but one
the court will not enforce. Unenforceable is usually used in
contradiction to void (or void ab initio) and voidable. If the parties
perform the agreement, it will be valid, but the court will not compel
them if they do not.</p>
</blockquote>
<p>In a quiz card about U.S. real estate law I found:</p>
<blockquote>
<p>An oral contract to convey an interest may meet the five conditions
for validity, but a court will not order a defaulting party to
perform. However, if the parties do perform, the contract is executed
and <em>cannot be rescinded under the Statute of Frauds.</em></p>
</blockquote>
<p>It looks like if there is performance of both parties of a valid but unenforceable contract, the contract can't be undone or rolled back by action of law.</p>

<p>I thought it would be useful to convert my various comments into a proper answer.</p>
<p>Let us take as an example a contract of guarantee. <a href="http://legislation.gov.uk/aep/Cha2/29/3/section/IV" rel="nofollow noreferrer">Section 4 of the Statute of Frauds 1677</a> prohibits bringing a claim on a contract of guarantee unless the contract is either in writing or evidenced in writing (and signed by the guarantor).</p>
<p>Let us imagine then that two parties A and B orally enter into a contract of guarantee over the telephone (with A as guarantor) and let us assume there is no other reason why the contract would not be enforceable (eg consideration). The Statute of Frauds doesn't invalidate the contract, it just means that B cannot sue A for breach unless and until there is written evidence signed by A of the contract.</p>
<p>So at the moment the contract is formed, it is valid but unenforceable.</p>
<p>Later on, A writes a memorandum of the guarantee and signs it and sends it to B. Nowadays that could be done by email (see, for example,  <a href="https://www.bailii.org/ew/cases/EWCA/Civ/2012/265.html" rel="nofollow noreferrer">Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd [2012] EWCA Civ 265</a>). Now the contract may be enforced by B.</p>
<p>The fact that there is a valid contract has very many legal implications. For example, the time and place of formation of a contract is a factor that a court may take into account in deciding the proper law to apply in interpreting it. So the analysis that there was a contract all along has implications, we cannot simply say &quot;oh, the contract isn't made until A signs the memorandum&quot;.</p>
<p>This sort of thing happens all the time in commercial situations.</p>
<p>I should add that this is not the same thing as (though it originated in) a requirement of evidence. English statute might require that something be in writing, but the writing may later have been lost or destroyed. That doesn't affect the validity of the writing because the existence of the writing may be proved by testimony. This is most common in situations where a will (which generally must be in writing) is lost but its contents are remembered.</p>

<p>The fact pattern I was taught first in law school is a case where you enter into an oral agreement subject to the statute of frauds (which, incidentally, I do not recall an agreement with a physician being subject to), and the oral argument is breached.</p>
<p>The non-breaching party files a complaint in a civil lawsuit for breach of contract against the non-breaching contract, and the non-breaching party files an answer to the complaint admitting that the contract was entered into, and not raising the affirmative defense of the statute of frauds, but raising some other defense (e.g. denying that the contract was breached). The lawsuit can then proceed on the merits without regard to the statute of frauds, which was waived when the breaching party admitted to contract formation in their answer.</p>
<p>In that situation, the statute of frauds rendered the contract unenforceable, but not <em>void ab initio</em>, since there was a meeting of the minds and it can be ratified or the impediment of the statute of frauds can be overcome by some other means. The statute of frauds can also often be overcome through part performance of the contract by the parties.</p>
<p>In contrast, suppose that someone gives you a document to sign stating that it is a receipt for a package, but it was actually release of claims in a pending lawsuit, which you couldn't see because your glasses were fogged up and you were relying on what the person presenting the document to you was saying. This is called <em>fraud in the factum</em> and even though you signed the piece of paper it does not lead to valid contract formation and is <em>void ab initio</em>.</p>
