Pg.s 231-244 Statute Of Frauds

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Statute of Frauds

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A state statute that requires certain types of contracts to be in writing

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There are several exceptions to the statute of frauds

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Part performance exception

Doctrine of promissory estoppel

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Statute of Frauds started in 1677

Meant to reduce Fraud from happening

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required certain types of contracts had to be in writing and signed.

Every US state has a statute of Frauds--requires contracts be in writing

so that contracts can't be misinterpreted, fabricated, forgotten

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Executory Contract

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that is not in writing even though the Statute of Frauds requires it to be is UNenforceable by either aprty

Statute of Fraud is often raised as a DEFENSE against another trying to enforce the contract

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If an oral contract that should have been in writing under the Statute of Frauds is already executed

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neither party can seek to RESCIND the contract on the ground of noncompliance with Statute of frauds

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Real Property

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The land itself as well as buildings trees soil minerals timber plants crops fixtures and other things permanently affixed to the land or buildings

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Any contract that TRANSFERS an ownership interest in..

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REAL PROPERTY must be in writing to be enforceable

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Mortgage

written deed of trust

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An interest in real property given to a lender as security for the repayment of a loan

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Life estate

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An interest in real property for a person's lifetime; upon that person's death, the interest will be transferred to another party

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Easement

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A right to use someone else's land without owning or leasing it.

may be either expressed or implied--must be in writing to be enforceable

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One-Year rule

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A rule which states that an executory contract that cannot be performed by its own terms within one year of its formation must be in writing

if the performance of the contract is possible within the one year period the contract may be oral

if it exceeds the one year rule it needs to be in writing

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Guaranty Contract

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A promise in which one person agrees to answer for the debts or duties of another person.

It is a contract between the guarantor and the original creditor

There are at least 3 parties and 2 contracts.

First contract (original/primary contract) is between debtor and the creditor--doesnt have to be inwriting.

Second contract (guaranty contract) is between the person who agrees to pay the debt if the primary debtor does not (gurantor) and the original creditor.

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Gurarantor

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A person who agrees to pay a debt if the primary debtor does not.

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Main Purpose Exception

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An exception tot he statue of frauds which states that if the main purpose of transaction and an oral collateral contract is to provide pecuniary (financial) benefit to the guarantor the collateral contract does NOT have to be in writing to be enforced.
ex. you own a business you say you'll pay the bill if th business can't. th bank can hold you to your word even if its not in writing bec. MAIN PURPOSE was to benefit you as the proprietor


Leading object exception

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UCC Statute of Frauds Section 2-201(1)

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A section of the uniform commercial coe which sates that sales contracts for the sale of goods costing $500 or more must be in writing

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UCC Statute of Frauds Section 2A-201(1)

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A section of the Uniform Commercial code which states that lease contracts involving payments of $1000 or more must be in writing

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Equal dignity rule

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a rule which says taht agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable

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Past Performance

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An equitable doctrine that allows the court to order an oral contract for the sale of land or transfer or another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice.

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Integration of several writings

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The combination of several writings to form a single contract

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Incorporation by reference

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Integration made by express reference in one document that refers to and incorporates another document within it.

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Contracts usually have a glossary

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True

defines many of the words and terms used in contract

Standards of interpretation:
Ordinary words--dictionary
Technical words--technical meaning
Specific terms--qualify general terms

Usage of trade

typed words prevail over pretyped words

ambiguity will be resolved against the party who drafted the contract

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Parol evidence

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Any oral or written words outside the four corners of a written contract

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Parol evidence rule

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A rule hat says if a witen contract is a complete and final satement of the parties' agrmnt, any prior o contemporanous oral or written statemetns that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract.

there ARE several exceptions to this rule

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Merger or integration clause

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A cluase in a contract that stipulates that it is a complete integration and th exclusive expression of the parties' agreement. Also known as an integration clause.

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Promissory Estoppel

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An equitable doctrine that permits enforcement of oral contracts that should have ben in writing. It is applied to avoid injustice also known as EQUITABLE estoppel