Common sense indicates that when the Statute of Frauds requires a contract to be in writing, any modification of that contract must also be written. Yet, that is not always true. Under the so-called “Cummings rule,” an oral modification of a contract governed by the Statute of Frauds, affecting only the manner of performance, not the contract’s substance, is enforceable.
A classic application of the Cummings rule allows an oral modification of a written real estate purchase and sale agreement (“P&S”) to extend the closing date. Assume, for example, that on February 3, 2017, the seller and buyer of real property enter into a written P&S which requires that the closing of the sale be completed, at the registry of deeds, on or before March 1, 2017. Prior to expiration of the March 1 deadline for performance, at the buyer’s request, the parties orally agree to extend the closing date to March 8, 2017.
On that date, the buyer appears at the registry of deeds, ready, willing and able to complete the purchase. The seller refuses to perform, arguing that buyer’s right under the P&S to purchase the property expired on March 1, 2017, and that the extension was ineffective because it was not in writing. On these facts, the buyer is entitled to specifically enforce the P&S.
A modification of a contract within the Statute of Frauds must usually be in writing.
The Massachusetts Statute of Frauds, G.L. c. 259, §1, states, in relevant part,
No action shall be brought:
Fourth, Upon a contract for the sale of lands, tenements or hereditaments or of any interest in or concerning them; or,
Unless the promise, contract or agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith or by some person thereunto by him lawfully authorized.
In the hypothetical above, the P&S clearly related to the sale of land or an interest therein, and was subject to the Statute of Frauds. It satisfied the Statute of Frauds because it was in writing and signed by the parties. The extension agreement was not in writing and so did not satisfy the Statute of Frauds.
The general rule is that where a contract is subject to the Statute of Frauds, a modification or amendment of such contract is also within the Statute of Frauds and must be in writing. Rex Lumber Co. v. Acton Block Co., 29 Mass. App. Ct. 510, 515 (1990), citing Cummings v. Arnold, 3 Met. 486, 489-92 (1842); Whittier v. Dana, 10 Allen 326 (1865); Rosenfeld v. Standard Bottling and Extracts Co., 232 Mass. 239, 245 (1919); Johnston v. Holiday Inns, Inc., 565 F.2d 790,-793-96 (1st Cir. 1977). See also Croft v. National Bedding Co., 2006 WL 1716754, *2 (D. Mass. 6/20/06) (“amendments to a contract that is within the Statute of Frauds are themselves within the Statute of Frauds.”); Lydon v. Nationwide Mut. Ins. Co., 1997 WL 260064, *8 (D. Mass. 5/9/97) (“The general rule [in Massachusetts] is that an oral modification … of a written contract which originally was and as modified is within the statute of frauds cannot be wholly or in part the foundation of an action” (internal quotation marks omitted)); Field v. Riesman, 2001 WL 35937358 (Mass. Super. 3/27/01) (“Modifications or amendments to a contract that is within the Statute of Frauds are themselves within the Statute of Frauds.”)
The Cummings rule.
There is, however, and exception to the general rule, where a contract within the Statute of Frauds is orally modified only with regard to the time or manner of performance, not the substance of the contract. In Cummings v. Arnold, 3 Met. 486, 489-92 (1842), the Court held that a defendant who had been sued for breach of a written contract could raise in defense his compliance with an oral modification to that contract which extended the time to perform. See also Johnston v. Holiday Inns, Inc., 565 F.2d 790, 793-96 (1st Cir. 1977). In Stearns v. Hall, 9 Cush. 31 (1851), the Supreme Judicial Court extended the so-called “Cummings rule” to allow a plaintiff, who is suing on a written contract within the Statute of Frauds, to rely on an oral modification which extends the time for performance in order to prove the plaintiff’s own compliance with the contract. Whether raised by the defendant or the plaintiff, the oral modification can escape the Statute of Frauds only if it concerns the time or manner of performance and does not work so great a change as to effectively rewrite the contract.
In McKinley Investments, Inc. v. Middleborough Land, LLC, 62 Mass. App. Ct. 616, 619 (2004), an oral modification to a real estate P&S affected the time of performance, tolling and the price to be paid. The Court held that the modification established only a substitute performance, not a substitute contract, and therefore the Statute of Frauds did not render the modification unenforceable. The Court made clear that an enforceable modification might involve more than just the time for performance, stating,
We hold that the judge was correct in characterizing the modifications, as pressed by McKinley, as affecting time, tolling, and price. However, the changes did not rewrite the contract. Their effect was to establish a substitute performance, rather than a substitute contract. See Johnston v. Holiday Inns, Inc., 565 F.2d 790, 796 (1st Cir.1977) (after review of Massachusetts cases, concluding that the test is whether “the parol modification becomes so extensive and significant that it is not a mere substituted performance,” but rather “[i]t becomes a new contract and that new contract must be proved by a writing”). Compare Rosenfeld v. Standard Bottling & Extracts Co., 232 Mass. 239, 244–245, 122 N.E. 299 (1919) (finding substituted contract, rather than substituted performance, where modified agreement had “nothing in common” with original agreement and obligations of plaintiff were “utterly different”). The decision was also incorrect to restrict allowable modifications solely to those “simply extend[ing] the time of performance,” despite McKinley’s claim that the modifications all boiled down to an extension of time for performance. Here, McKinley’s performance obligations and conditions were, in part, moveable, dependent upon due diligence, and not simply a fixed closing date. The timing and mode of performance were rather typical of a modern Massachusetts land transaction that requires, for accomplishment, governmental permits. At first blush, the bulk of the text defining the performance requirements suggests such complexity that any modification would be other than simple. However, upon closer examination, the identified modifications are, as matter of law, most fairly described as “mode[s] of performance … varied by a subsequent oral agreement based upon a valid consideration,” which our cases have permitted. Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 439, 597 N.E.2d 1017 (1992), quoting from Siegel v. Knott, 316 Mass. 526, 528, 55 N.E.2d 889 (1944).
While it is true that the court in Rex Lumber Co. v. Acton Block Co., 29 Mass.App.Ct. at 515–516, 562 N.E.2d 845, spoke of a line of cases instructing that a plaintiff may enforce a contract which has been modified by an oral agreement to extend the time for performance, several cases cited by the court did not limit the possibility of oral modification only to time for performance. The Rex court cited Moskow v. Burke, 255 Mass. 563, 567, 152 N.E. 321 (1926) (“[t]he parties could at any time before breach orally modify the time and manner of performance fixed by the contract” [emphasis supplied] ); Siegel v. Knott, 316 Mass. at 528, 55 N.E.2d 889 (the oral agreement “changed the method by which the plaintiffs had undertaken to pay their mortgage indebtedness” [emphasis supplied] ); Wesley v. Marsman, 393 Mass. 1003, 1004, 471 N.E.2d 51 (1984) (the parties had “orally modified the terms of the original agreement concerning the return of the deposit ” [emphasis supplied]).
In this case the modifications regard both the time for performance (the twelve-month extension and the substitution of a definite time period for a tolling period) and the payment of additional money. While the payment appears to us, in the circumstances, as consideration for the contract modification, we do not consider it relevant on summary judgment that the parties contest whether the additional payment is consideration or an increase in the sale price. In either case, the fact of payment is not sufficient to render the oral modification invalid. We hold that it was error for the judge to have ruled that the identified modifications rendered the contract, as amended, unenforceable. Summary judgment was improperly granted.
Id. at 619-20. (Emphasis added). According to the Court in Lydon,
The general rule [in Massachusetts] is that an oral modification … of a written contract which originally was and as modified is within the statute of frauds cannot be wholly or in part the foundation of an action. There are, no doubt, exceptions to the general rule, most notably the “Cummings rule,” described in Johnston as “a doctrine accepted in Massachusetts under which ‘in defence to an action on the written contract [within the Statute of Frauds], the defendant may show that he has performed it according to an oral agreement for a substituted performance.’” The First Circuit went on to explain the Cummings rule as one under which a plaintiff could not sue upon the oral modification, but a defendant was entitled to set it up as a defense….
Massachusetts does, however, recognize a narrow exception to the rule that oral amendments to contracts within the statute of frauds may be used as shields but not as swords. That narrow exception deals with the case in which a plaintiff attempts to sue on a contract within the statute of frauds and is met with the defense that the defendant’s obligation was discharged by plaintiff’s own failure to perform within the time requirements set forth in the written agreement. When met by such a defense, plaintiff is permitted to claim in rebuttal that its time for performance was extended by an oral agreement.
1997 WL 260064, *8. (Emphasis added, internal quotation marks, citations and footnote reference omitted).
And in Kelly v. Dolben, 12 Mass. L. Rptr. 509, 2000 WL 33170862 (Mass. Super. 10/4/00), the Court summarized the enforceability of oral modifications to contracts within the Statute of Frauds as follows,
Although the Statute of Frauds generally bars a plaintiff from suing upon an oral modification of a written contract, it does not bar a defendant from showing that he has performed the contract according to an oral agreement for substitute performance.
The Supreme Judicial Court has limited what may constitute an oral agreement for a substitute performance. In Cummings, the plaintiff sued for breach of contract after the defendants failed to deliver a quantity of goods at a price stipulated in the written contract. The defendants argued that the plaintiff had not complied with oral agreements calling for the plaintiff to pay cash for the goods. The Court held that the Statute of Frauds did not bar the defense because the oral agreement did not vary the terms of the written contract as to the defendant’s performance, and only altered the time of payment by the plaintiffs. In Stearns v. Hall, 9 Cush. 31, 33-34 (1851), the Court extended this rule to allow a plaintiff suing on a written contract for the sale of land to prove satisfaction of a substituted performance concerning the time of payment. Although the defendant argued that Cummings was inapplicable since the party relying on the parol agreements seeks to charge the defendant upon it, the Court held that the Statute of Frauds did not bar the suit. This rule is now well settled; only the manner of, or time for, performance of a written contract within the Statute of Frauds may be modified orally.
To determine whether an oral agreement falls within the holding of Cummings, the court must compare it against the written contract. If the modification is so material and so extensive that the original contract has disappeared, and differs so much from the original contract that it constitutes not a mere substituted performance, but a new contract that must be proved by writing, the defense is not available.
Id. at *2-3. (Emphasis added, internal quotation marks and citations omitted). See also Aragao v. MERS, Inc., 22 F.Supp.3d 133, 139 n.6 (D. Mass. 2014); Akar v. FNMA, 845 F.Supp.2d 381, 397 (D. Mass. 2012); Rex Lumber Co. v. Acton Block Co., 29 Mass. App. Ct. 510, 515 (1990); Mack v. Wells Fargo Bank, N.A., 29 Mass. L. Rptr. 14, 2011 WL 4837261, *6 (Mass. Super. 8/31/11); Deluca v. U.S. Bank National Assoc., 25 Mass. L. Rptr. 252, 2009 WL 839098, *3 (Mass. Super. 3/13/09) (recognizing rule but holding it inapplicable to the facts); Humbert v. Dworman, 2005 WL 2461969, * 3 (Mass. Super. 7/22/05) (in action to enforce P&S, court recognizes rule but holds it inapplicable to the facts); Jonaitis v. Robbins, 2005 WL 14736, *3-5 (Mass. Land Ct. 1/3/05) (relying on Cummings rule to enforce oral modification to P&S); First General Realty Corp. v. Carppinteri, 13 Mass. L. Rptr. 39, 2001 WL 417274, *8-9 (2/7/01) (recognizing Cummings rule but holding that oral modification in case before it was too extensive); Brown v. Smith, 1999 WL 1318987, * 3 (Mass. Super. 3/11/99) (the Statute of Frauds “does not prohibit an oral modification to a purchase and sale agreement. The manner of, or time for, performance of a written contract within the statute of frauds may be modified orally).
The foregoing case law indicates that an oral modification to a written contract within the Statute of Frauds can be relied upon so long as the modification establishes only a substitute performance, and is not so great a change as to create an entirely new contract. Courts have allowed parties to rely on such oral modifications for defensive purposes only, and have not allowed claims which seek to enforce the terms of an oral modification. Johnston, 565 F.2d at 793-96; Croft, 2006 WL 1716754, *2-3. Thus, while a party cannot sue to enforce the terms of an oral modification, that party may sue to enforce the terms of the written contract and may rely on the oral modification defensively to establish his own compliance with the contract.
In our hypothetical, although the P&S was a written contract subject to the Statute of Frauds, the parties’ agreement extending the closing date was not required to be in writing. That agreement was a modification to the P&S, but concerned only the time for performance. Field, 2001 WL 35937358 (“Modifications or amendments to a contract that is within the Statute of Frauds are themselves within the Statute of Frauds. This rule, however, is subject to the exception that a contract within the statute may be modified by oral agreement to extend the time or mode of performance. Accordingly, an oral extension of a closing date may be valid, notwithstanding a requirement in the purchase and sale agreement that such extension be in writing, provided the parties orally waive the requirement of a writing.” (Emphasis added, citations omitted)).
The buyer’s action to enforce the P&S falls within the Cummings rule because the buyer brings a claim to enforce the written contract, but the seller raises the defense that the buyer did not itself comply with contract, by failing to close the deal by the original March 1, 2017, deadline. Under these circumstances, the buyer can rely on the oral modification to show that the closing date was extended, thus establishing the buyer’s own compliance.
In summary, while it is always better practice to memorialize any legal agreement in writing, in limited circumstances the parties may orally modify even a contract subject to the Statute of Frauds.