Contracts--24

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9) The statute of frauds.

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(1) In most instances, oral contracts are valid. However, by statute, a few types of contracts are required to be in writing, or at least evidenced by a signed, written memorandum of their essential terms. These statutory requirements stem from the ______

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i) In most instances, oral contracts are valid. However, by statute, a few types of contracts are required to be in writing, or at least evidenced by a signed, written memorandum of their essential terms. These statutory requirements stem from the English Statue of Frauds of 1677

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(1) The basic purpose of the Statue of Frauds is to prevent ___ and ___ as to the actual ___ of the contract. The requirements of a ____ serves to provide better evidence of the contract terms in the event of dispute.

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ii) The basic purpose of the Statue of Frauds is to prevent fraud and perjury as to the actual terms of the contract. The requirements of a writing serves to provide better evidence of the contract terms in the even to f dispute.

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iii) What types of contracts must be in writing?

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(1) Guarantee contracts (2) Contracts for the sale of land (3) Contracts for the sale of goods. (4) Contracts in consideration of marriage (5) Contracts that are incapable of being performed within one year.

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iv) Define: Guarantee Contracts

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(1) Promises to answer for or discharge the debts of another

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v) Who do Guarantee contracts apply to?

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(1) By one who is not presently liable for the debt (2) To a creditor of an obligee (3) In order to discharge the present or future obligations of a third person.

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vi) What are the exceptions to the guarantee contract requirement to be in writing? (ie these can be in writing)

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(1) Promises to the debtor and supported by consideration. (2) Primary debt by promisor.. If the real contracting was between the promisor and the creditor, the promise is enforceable although oral. (3) Guarantor’s main purpose to benefit himself—even if the promise is collateral, if it appears that the promisors main purpose in guaranteeing the obligation of another was to secure an advantage of pecuniary benefit for himself, his promise is enforceable though oral.

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vii) Do leases for one year or less have to be in writing?

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(1) NO.

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viii) For interests in land, do fixtures, liens, future inters, growing timber and the like have come within the statute? Do agreements to split profits or proceeds form the purchase and sale of realty need to be in writing?

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(1) Yes (2) No.

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(1) Part performance of an executory land sale contract may take it out of the statue where ____ (ie _____) is sought. But this is an equitable concept only and does not apply if the action is at ____.

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ix) Part performance of an executory land sale contract may take it out of the statue where equitable relief (ie specific performance) is sought. But this is an equitable concept only and does not apply if the action is at law.

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(1) A contract for the sale of any goods for the price of $___ or more must be in writing.

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x) A contract for the sale of any goods for the price of $500 or more must be in writing.

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xi) Define: Goods (for the statute of frauds)

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(1) Goods include all tangible movable property in existence or to be manufactured by the seller in the ordinary course of business. It does not include intangibles, securities, or labor and services.

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xii) What are the exceptions for the contracts for the sale of goods that do not fall within the statute of frauds? (ie if it’s a good and over $500)

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(1) The buyer accepts and receives all or part of the goods (in which case the contract becomes enforceable as to the goods accepted and received); (2) The buyer gives something in part payment for the goods (in which the case the contract is enforceable as to the goods for which payment has been made); (3) The contract calls for the manufacture of special goods for the buyer, which goods are not suitable for sale to others in the ordinary course of the sellers business, and the seller as made a “substantial beginning” in their manufacture or commitments for their procurement (4) The contract is between merchants, and within a reasonable time as written confirmation (which satisfies the statue as to the sender) is sent and the party receiving it does not dispatch a written objection thereto within 10 days. (5) The contract is admitted by the party against whom enforcement is sought “in his pleadings or testimony in court”.

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(1) A contract for the sale of contract rights, royalties, copyrights, or other choices in action has to be made in writing if in an action to enforce the contract, the remedy sought exceeds $____?

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xiii) A contract for the sale of contract rights, royalties, copyrights, or other choices in action has to be made in writing if in an action to enforce the contract, the remedy sought exceeds $5000?

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xiv) Does the statute encompass marriage settlements contracts or prenuptial contracts but not to mutual promises to marry between prospective spouses?

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(1) Yes

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(1) Contract that are incapable of being performed within one year. This refers only to contracts that, by their terms, cannot by any possibility be performed within one year from the ____ thereof. The one-year prod begins from the date the contract is ___, not when ____..

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xv) Contract that are incapable of being performed within one year. This refers only to contracts that, by their terms, cannot by any possibility be performed within one year from the making thereof. The one-year prod begins from the date the contract is made, not when performance is promised.

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xvi) Is the statute applicable if performance within one year is possible, although unlikely?

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(1) Yes

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xvii) Is an oral agreement to perform upon a condition that conceivably might occur within on year subject to the statute of frauds?

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(1) No

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xviii) Are contracts to perform until the happening of some condition that conceivably might occur within on year subject to the statute of frauds

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(1) No

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xix) Are agreements for alternative performances, any one how which is capable of full performance within on years (eg to furnish goods to another for five years, or so long as she should remain in business”_) subject to the statute of frauds?

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(1) No

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(1) In some sates, the statute of frauds requiring contracts incapable of performance within one year to be in writing is extended to contracts not to be performed during the ____ of the promisor, as well as agreements to make a ___ or __ or __ property.

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xx) In some sates, the statute of frauds requiring contracts incapable of performance within one year to be in writing is extended to contracts not to be performed during the lifetime of the promisor, as well as agreements to make a will or devise or bequeath property.

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(1) Even if a contract is impossible to perform within one year, the great weigh to authority holds that if it is ___..., this will take the entire contract out of the statute and make the oral promise enforceable.

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xxi) Even if a contract is impossible to perform within one year, the great weigh to authority holds that if it is fully executed on one side, this will take the entire contract out of the statute and make the oral promise enforceable.

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xxii) Did the original statute of frauds expressly provide that a memorandum was sufficient if signed by an authorized agent of the party to be charged?

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(1) Yes

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xxiii) What do Equal dignity statues do

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(1) Under such statutes, if a contract is required by law to be in writing (ie it falls within the statute of frauds), then ay agent who purports to enter into such contract on the behalf of another must have authority in writing ot do so. (2) However, the agent’s authority need not appear in writing if the principal has told the other party that the agent was authorized to act on his behalf (ie estoppel theory); or if the contract is subsequently ratified in writing by the principal.

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xxiv) What type of writing is required for the statute of frauds?

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(1) It must be in a permanent, written form and signed by the party to be charged. This does not mean that the writing must be in a fully integrated, formal contract.

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xxv) Describe: The Memorandum of essential terms and what goes in there

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(1) A memorandum of the essential terms is a document (eg a letter, telegram, or even an UNDELIVERED note) that will satisfy the statute if it contains (a) The identity of the contracting parties (b) A description of the subject matter of the contract; (c) The terms and conditions of the agreements (d) A recital of the consideration (in many states); and (e) The signature of the party sought to be charged. (i) The signature can go anywhere in the document and need not be at the end. A signature may also be affixed by an authorized agent. The signature of the party sought to be held liable need appear. It needs not be handwritten; it can be typed or printed.

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xxvi) In auction sales, is an auctioneer’s memorandum of the terms of the sale, signed only by the auctioneer, held sufficient? Why?

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(1) Yes. (2) Because he is both the bidder and seller in making a memorandum.

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xxvii) Can the requisite writing or memorandum be composed of several documents, provided that each document refers to or incorporates the others or they are otherwise integrated (eg by being physically attached).

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(1) Yes

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xxviii) Under the UCC, is less completeness in terms required in contracts for the sale of goods for quantity only? (ie there need only be “some writing sufficient to indicate that a contract for sale has been made” and specifying the quantity, even though it omits or incorrectly states other terms agreed upon?

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(1) Yes