BUSINESS LAW ( CHAP.14) - STATUTE OF FRAUDS AND EQUITABLE EXCEPTIONS

Statute of Frauds

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

Rescind

An act that cancels a contract

Real Property

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

Mortgages

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

Leases

A term that is used to indicate a contract for the lease of goods and contract for the rental of real property

Life estate

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

Easement

A given or required right to make limited use of someone else's land without owning or leasing it.

One-year rule

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

Guaranty contract

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

Original contract

In a guarantee situation, the contract between the debtor and the creditor which the guarantor has guaranteed to pay

main purpose exception

An exception to the Statute of Frauds that states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor, the collateral contract does not have to be in writing to be enforced.

Agent's contract

Real estate agents' contracts to sell real property for another party that are covered by the Statute of Frauds and must be in writing to be enforceable.

equal dignity rule

A rule that says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable

prenuptial agreement

contract entered into by parties prior to marriage that defines their ownership rights in each other's property, must be in writing

Integration

The combination of several writing to form a single contract

Incorporation by reference

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

standards of interpretation

Rules applied by courts in defining ordinary words, technical words, specific terms, and other words used in contracts

Parole-evidence

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

Parol Evidence Rule

A rule that says if a written contract is a complete and final statement of the parties' agreement, any prior or contemporaneous oral or written statements 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.

Merger clause

A clause in a contract that stipulates that it is a complete integration and the exclusive expression of the parties' agreement

Exceptions to the Parol Evidence Rule

1. Evidence of fraud, duress, or mistake

2. Failure of consideration

Promissory Estoppel

an equity doctrine that permits a court to order enforcement of a contract that lacks consideration