Robert and Lynette Knigge owned a B&L Food Store in Redfield, South Dakota. Robert, diagnosed with brain cancer and given five months to live, entered into an oral contract with his brother, David, to manage the store. Robert died five months after the date of the contract. Lynette terminated David’s employment two months later. David filed a suit in a South Dakota state court against his sister-in-law. He alleged that the oral contract with his brother provided for a severance payment if Lynette ended his employment after her husband’s death.

Does the one-year rule under the Statute of Frauds apply to these facts? Under what circumstances might Lynette have an ethical duty to honor Robert’s promise to his brother?

Is David ethically obligated to honor Lynette’s decision?

Explain.