Haase v. Glazner – Case Brief Summary (Texas)

In Haase v. Glazner, 62 S.W.3d 795 (Tex. 2001), the Supreme Court considered the effect of the statute of frauds on a fraud claim based on an unenforceable agreement.

The court held that the statute of frauds would not bar a fraud claim to the extent a plaintiff seeks reliance damages, i.e., the out-of-pocket expenditures made in reliance on the misrepresentations. Id. at 799--800.

The court reasoned that "these kinds of damages are not part of the benefit of any alleged bargain between the parties." Id. at 800.

On the other hand, to the extent a plaintiff seeks to recover damages for the benefit of a bargain that could not be enforced because the agreement fails to comply with the statute, the court held that the statute of frauds bars the fraud claim.

"If in the face of the Statute of Frauds we permit Glazner's fraud claim to the extent he seeks to recover the benefit of the unenforceable bargain, we deprive the Statute of any effect. The Statute exists to prevent fraud and perjury in certain kinds of transactions by requiring agreements to be set out in a writing signed by the parties. But that purpose is frustrated and the Statute easily circumvented if a party can use a fraud claim essentially to enforce a contract the Statute makes unenforceable." Id. at 799.

The Court held that Texas law imposes a duty to abstain from inducing another to enter into a contract through the use of fraudulent misrepresentations, but "there can be no breach of that duty when one is not induced into a contract." Id. at 798.

The Haase court stated, "When a party has not incurred a contractual obligation, it has not been induced to do anything." Id.

It concluded that because the parties in Haase "never reached a final agreement" the plaintiff could not maintain a fraudulent inducement claim. Id.