Ch 15: Statute Of Frauds - Writing Requirement (Contracts)

Front 1

Statute of Frauds

Back 1

certain agreements are required by law to be in writing. If there is no written evidence of the contract, it may not be enfroceable

Front 2

Contracts that fall within the Statute of Frauds (5 types)

Back 2

1) Contracts involving interests in land.
2) Contracts that cannot by their terms be performed within one year from the day after the date of formation
3) Collateral, or secondary, contracts, such as promises to answer for the debt or duty of another and promises by the administrator or executor of an estate to pay a debt of the estate personally - that is, out of his or her own pocket
4) Promises made in consideration of marriage
5) Under the Uniform Commercial Code (UCC), contracts for the sale of goods priced at $500 or more

Front 3

Contract Involving Interests in Land

Back 3

Land is real property and includes all physical objects that are permanently attached to the soil
EX: If Sam contracts orally to sell Blackacre to Betty but later decides not to sell, under most circumstances Betty can't enforce the contract

Front 4

One Year Rule

Back 4

A contract that can't, by its own terms, be performed within one year from the day after the contract is formed must be in writing to be enforceable
EX: University wants San to teach two semesters (Sept 15-June 15). If agreed in March, must be written. If agreed June 14th or after it doesn't.
*the performance must be able to be POSSIBLE within one year, doesn't have to be LIKELY

Front 5

Collateral Promise

Back 5

a secondary promise is one that is ancillary (subsidiary) to a principal transaction or primary contractual relationship.
In other words, a colleteral promise is one made by a 3rd party to assume the debts or obligations of a primary party to a contract if that party does not perform

Front 6

Primary Obligation

Back 6

Person with which direct contact is made to create the contract
Does NOT have to be in writing to be enforceable
EX: Having a flower shop deliver flowers - buyer must pay, can't cite Statute of Frauds to get out of it

Front 7

Secondary Obligation

Back 7

collateral promise - will pay if primary fails to do so
DOES have to be in writing to be enforceable
EX: Mom borrows 10,000 and son promises to pay. Can't be held accountable to pay unless it is in writing

Front 8

Exception to the "Main Purpose" Rule

Back 8

An oral promise to answer the debt of another is covered by the Statute of Frauds UNLESS the guarantor's main purpose in incurring secondary obligation is to secure a personal benefit.
This need NOT be in writing.
EX: Interim party. Braswell contracts with CMC to have machines made for Braswell. She promises Newform Supply (CMC's supplier) payment if they keep delivering goods. This benefits Braswell and need not be written.

Front 9

Prenuptial agreements

Back 9

agreements made before marriage that define each partner's ownership rights in the other partner's property
MUST be in writing to be enforceable

Front 10

Contracts for the sale of goods

Back 10

the UCC includes statute of frauds provisions that require written evidence of a contract for the sale of goods priced at $500 or more
-writing only needs to state quanity term
-a written memorandum will suffice

Front 11

specific performance

Back 11

-performance of the contract according to its precise terms
-in cases involving contracts relating to the transfer of interests in land, a court may grant this of an oral contract that has been partially performed
-under the UCC an oral contract for the sale of goods is enforceable to the extent that a seller accepts payment or a buyers accepts delivery of goods

Front 12

admissions

Back 12

if a party against whom enforcement of an oral control is sought "admits" in pleadings, testimony, or otherwise in court that a contract for sale was made, the contract is enforceable

Front 13

promissory estoppel

Back 13

if a promisor makes a promise on which the promisee justifiably relies to his of her detriment, a court may estop (prevent) the promisor from denying that a contract exists

Front 14

Special Exceptions under the UCC

Back 14

-oral contracts for customized goods may be enforced
-another exception has to do with oral contracts between merchants that have been confirmed in a written memorandum

Front 15

Sufficiency of the Writing

Back 15

Statute of Frauds and the UCC require either a written contract or a memorandum (written evidence of an oral contract) signed by the party against whom enforcement is sought
-the signature can be anywhere in the document
-it can be an initial
-it can be an electronic signature

Front 16

what constitutes a writing?

Back 16

-any order confirmation (invoice, sales slip, check, fax, or email)
-need not consist of a single document
-one document can expressly refer to another document
-can be phsically attached (staple, paper clip, glue)

Front 17

What must be contained in the writing?

Back 17

-a memorandum or note evidencing the oral contract need only contain the essential tems, not every term
-must be some indication that the parties voluntarily agreed to the terms
-should show "meeting of the minds"
-under UCC: need only state quantity and be signed by the party to be charged
-Under Statute of Frauds: wrighting must also name the parties, identify the subject matter, the consideration, and the essentail terms with reasonable certainty
-because only the party against whom enforcement is sought must have signed the writing, a contract may be enforceable by one of its parties but not by the other

Front 18

parol evidence rule

Back 18

testimony or other evidence of communications between parties that are not contained in the contract itself
-if a court finds that the parties intended their written contract to be a complete and final statement of their agreement then it will not allow either party to present parol evidence

Front 19

Exceptions to the parol evidence rule

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1. contracts subsequently modified
2. voidable or void contracts
3. contracts containing ambiguous terms
4. incomplete contracts
5. prior dealing, course of performance, or usage of trade
6. contracts subject to an orally agreed-on condition precedent
7. contracts with an obvious or gross clerical error that clearly would not represent the agreement of the parties

Front 20

integrated contract

Back 20

if the contract is intended to be a complete and final statement of the terms of an agreement
-in these extraneous evidence (evidence derived from sources outside the contract itself) is excluded