Contracts: Statute Of Frauds

Front 1

Statute of Frauds

Back 1

Most oral contracts enforceable

Certain types need to be in writing to be enforceable (“within SOF”) --> MY LEGS

Front 2

Interest in Real Property [w/in SOF]

Back 2

1) Includes leases, easements

2) Agent’s authorization regarding real property must be in writing per equal dignities rule (if underlying transaction has to be written, then so does agent authority)

Front 3

Performance Cannot Be Completed within a Year

Back 3

1) As long as full performance within a year theoretically possible, no writing required per SOF

2) Actual performance time and duration of performance is irrelevant

3) Clock starts when K is made

Front 4

Sale of Goods for $500 or More (Article 2)

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*Article 2 applies to every sale of goods; SOF applies only to sales of $500 or more

Front 5

Lease of Goods for $1000 or More (Article 2A **TX ONLY)

Back 5

Make sure you figure out total cost of lease

Front 6

Suretyship

Back 6

1) A promise to “answer for” debt of another (backup, liable only if original person doesn’t pay)

2) If only one person liable, it’s not a suretyship

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Contract Modification: writing only if K as modified (not original) is within SOF

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1) CL: clauses prohibiting oral modification unenforceable; can modify K orally even if you've agreed not to

[*diff from Article 2]
2) Article 2 allows parties to create own SOF (in original written K)

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Satisfactory writing: depends on nature of K

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1) Sale of Goods (Article 2): must contain a quantity and be signed by party to be charged with breach (D)
--> Absence of price irrelevant

2) Other K: needs all material terms (who? what?); signed by D

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Exceptions carved out where there is little chance of fraud

Real Property

Back 9

1) Lease of 1 year or less (legislative exception to ensure short-term leases not invalidated by SOF)

2) Part performance→ need some payment and permanent improvement [Full payment alone is insufficient for part performance]

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Exceptions carved out where there is little chance of fraud

One-Year Prong: Full Performance Exception

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1) Part performance insufficient; bars K enforcement due to SOF

2) BUT can recover in quasi-K for reasonable value of benefit conferred

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Exceptions carved out where there is little chance of fraud

Sale of Goods for $500 or More (Article 2)

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1) Goods accepted or paid for by buyer
--> Exception applies only to goods accepted or paid for, NOT whole K

2) Custom-made goods: seller has made a substantial beginning and goods unsuitable for sale in ordinary course of his business

3) Judicial admission: of K in a deposition, testimony, etc.

4) *** Merchants’ confirmatory memo

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Merchants’ confirmatory memo**

One party can use its own signed writing to satisfy SOF:
1. Both parties are merchants (w/in code)
2. Writing claims prior oral agreement and has a quantity term; AND
3. No written objection within 10 days

Back 12

* 2 merchants agree over phone and one follows up w/written confirmation. Article 2 allows merchant to use its own confirmation to satisfy SOF against other. Want enforceable oral agreements.

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Exceptions where there is little chance of fraud

Suretyship "Main Purpose Exception"

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If suretyship’s main purpose in making promise was to benefit himself, no writing was required.