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Chapter 15 Contracts: Statute of Frauds BONUS

The document summarizes key aspects of the Statute of Frauds. It requires certain types of contracts to be evidenced by a writing, such as contracts for the sale of land or goods over $500. Contracts that cannot be completed within one year also must be in writing. The Statute of Frauds originated in 1677 England and exists today in state laws. Exceptions include partial performance, admissions, and promissory estoppel. The writing must include essential terms and be signed but does not need to be a single document.

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52 views3 pages

Chapter 15 Contracts: Statute of Frauds BONUS

The document summarizes key aspects of the Statute of Frauds. It requires certain types of contracts to be evidenced by a writing, such as contracts for the sale of land or goods over $500. Contracts that cannot be completed within one year also must be in writing. The Statute of Frauds originated in 1677 England and exists today in state laws. Exceptions include partial performance, admissions, and promissory estoppel. The writing must include essential terms and be signed but does not need to be a single document.

Uploaded by

amsimm88
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 15 Contracts: Statute of Frauds BONUS

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

Section 1: The Origins of the Statute of Frauds


1677 England passed the law An act for the prevention of frauds and abuses certain types of contracts must be in writing and signed by the party against whom enforcement is sought to be enforceable almost every state has a statue, modeled after the English act that stipulates what types of contracts must be in writing or evidenced by a writing The Statute of Frauds does not apply to fraud rather it denies enforceability to certain contracts that do not comply with its requirements (of being in writing) Contracts that fall within or under the Statue of Frauds: o contracts involving land o contracts that cannot be their terms be performed within one year from the day of formation o collateral or secondary contracts o promise made in consideration of marriage o contracts for the sale of goods priced at $500 or more Contracts involving land o a contract involving land must be evidenced by a written memorandum o also requires written evidence for the transfer of other interests in land mortgage agreements, leases, etc. The One-Year Rule o a contract that cannot be performed within one year must be in writing to be enforceable o when performance of a oral contract is impossible during the one year period, the oral contract will be deemed unenforceable Collateral Promises o collateral promise- one made by a third party to assume the debts or obligations of a primary party to a contract that if party does not perform. Must be in writing. primary vs. secondary obligations: primary obligations need not be in writing, for example an oral contract to deliver promises secondary obligations need to be in writing to be enforceable, for example loan payments exception- The Main Purpose Rule an oral promise to answer for the debt of another is covered by the statue of frauds unless the guarantors main purpose in incurring a secondary obligation is to secure a personal benefit a typical application of the main purpose rule occurs when one creditor guarantees a debtors debt to another creditor to prevent litigation

Section 2: Contracts that Fall within the Statue of Frauds

Promises Made in Consideration of Marriage o a unilateral promise to make a monetary payment or to give property in consideration of a promise to marry must be in writing o prenuptial agreements o Consideration generally required courts tend to give more credence to prenuptial agreements that are accompanied by consideration Contracts for the Sale of Goods o The UCC includes Statue of Frauds provisions that require written evidence of a contract for the sale of goods priced at $500 or more Exceptions to the applicability of the statue of frauds o partial performance- in cases involving contracts relating to the transfer of interests in land, a court may grant specific performance of an oral contract that has been partially performed. The party seeking performance must have reasonably relied on the contracts and so changed her or his position that injustice can be avoided only be specific performance. o admissions- if a party against whom enforcement of an oral contract is sought, admits in pleadings, testimony, or otherwise in court that a contract for sale was made, the contract will be enforceable o promissory estoppel- in some states an oral contract may be enforced under the doctrine of promissory estoppel, based on detrimental reliance o section 139 of the restatement of contracts provides that an oral promise can be enforceable notwithstanding the Statute of Frauds if the reliance was foreseeable to the person making the promise and if injustice can be avoided only be enforcing the promise What constitutes a Writing? o any order confirmation constitutes writing, it need not consist of a single document for solely it invoice, sales slip, check, fax, email What must be contained in the writing? o memorandum sometimes a written contract does not include an oral understanding reached by the parties before or at the time of contracting, for example a landlord and a tenant may have an understanding about an animal allowed in the building, however the lease the tenant signed may say animals are not allowed parol evidence rule- 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 Exceptions to the Parole Evidence Rule o contracts subsequently modified o voidable or void contracts o contracts containing ambiguous terms o prior dealing, course of performance, or usage of trade o contracts subject to orally agreed on conditions

Section 3: Sufficiency of the Writing


Section 4: The Parol Evidence Rule

o contracts with an obvious or gross clerical error that clearly would not represent the agreement of the parties Integrated Contracts o The key in determining whether evidence will be allowed depends on whether the written contract is intended to be a complete and final statement of the terms of the agreement, if it is so it is referred to as a integrated contract, and extraneous evidence o an integrated contract can be either completely or partially integrated: completely-contains all of the terms of the parties agreement partially-contains only some of the terms, and evidence of consistent additional terms is admissible to supplement the written agreement

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