ACTG 355 Chapter 15

Rule (Contracts Within the Statute of Frauds)

Contracts within the statute of frauds must be evidenced by a writing to be enforceable.

Electronic Records (Contracts Within the Statute of Frauds)

Full effect is given to electronic contracts and signatures.

Suretyship Provision (Contracts Within the Statute of Frauds)

Applies to promises to pay the debts of others.

Original Promise (Suretyship Provision)

Promisor must be secondarily, not primarily, liable.

Main Purpose Doctrine (Suretyship Provision)

If primary object is an economic benefit to surety, the promise is not within the statute.

Promise Made to Debtor (Suretyship Provision)

Not included in suretyship provision

Executor-Administrator Provision (Contracts Within the Statute of Frauds)

Applies to promises to answer personally for duties of decedents.

Marriage Provision (Contracts Within the Statute of Frauds)

Applies to promises made in consideration of marriage but not to mutual promises to marry.

Land Contract Provision (Contracts Within the Statute of Frauds)

Applies to promises to transfer any rights, privileges, powers, or immunities in real property.

One-Year Provision (Contracts Within the Statute of Frauds)

Applies to contracts that cannot be performed within one year.

The Possibility Test (One-Year Provision)

The criterion is whether it is possible, not likely, for the agreement to be performed within one year.

Computation of Time (One-Year Provision)

The year runs from the time the agreement is made.

Sale of Goods (Contracts Within the Statute of Frauds)

A contract for the sale of goods for the price of $500 or more must be evidence by a writing or record to be enforceable.

Admission (Sale of Goods)

An admission in pleadings, testimony, or otherwise in court makes the contract enforceable for the quantity of goods admitted.

Specially Manufactured Goods (Sale of Goods)

An oral contract for specially manufactured goods is enforceable.

Delivery or Payment and Acceptance (Sale of Goods)

Validates the contract only for the goods that have been accepted or for which payment has been accepted.

Modification or Rescission of Contracts within the Statute of Frauds (Contracts Within the Statute of Frauds)

Oral contracts modifying existing contracts are unenforceable if the resulting contract is within the statute of frauds.

General Contracts Provision (Contracts Within the Statute of Frauds)

The writing(s) or record must:

•Specify the parties to the contract.

•Specify the subject matter and essential terms.

•Be signed by the party to be charged or by her agent.

Sale of Goods (Compliance with the Statute)

Provides general method of compliance for all parties and an additional one for merchants. •Writing(s) or Record must

(1)be sufficient to indicate that a contract has been made between the parties,

(2)be signed by the party against whom enforcement is sought or by her authorized agent, and

(3)specify the quantity of goods to be sold.

Written Confirmation (Sale of Goods)

between merchants, a written confirmation that is sufficient against the sender is also sufficient against the recipient unless the recipient gives written notice of his objection within ten days.

Oral Contract within Statute of Frauds (Effect of Noncompliance)

is unenforceable

Full Performance (Effect of Noncompliance)

Statute does not apply to executed contracts.

Restitution (Effect of Noncompliance)

Is available in quasi contract for benefits conferred in reliance on the oral contract.

Promissory Estoppel (Effect of Noncompliance)

Oral contracts will be enforced where the party seeking enforcement has reasonably and justifiably relied on the promise and the court can avoid injustice only by enforcement.

The Rule (Parol Evidence Rule)

When parties express a contract in writing that they intend to be the complete and final expression of their rights and duties, evidence of their prior oral or written negotiations or agreements of their contemporaneous oral agreements that vary or change the written contract are not admissible.

Situations to Which the Rule Does Not Apply (Parol Evidence Rule)

•A contract that is not an integrated document.

•Correction of a typographical error.

•Showing that a contract was void or voidable.

•Showing whether a condition has in fact occurred.

•Showing a subsequent mutual rescission or modification of the contract.

Supplemental Evidence may be admitted (Parol Evidence Rule)

•Course of Dealing – previous conduct between the parties.

•Usage of Trade – practice engaged in by the trade or industry.

•Course of Performance – conduct between the parties concerning performance of the particular contract.

•Supplemental Consistent Evidence.

Interpretation of Contracts

The ascertainment of the meaning of a promise or agreement or a term of the promise or agreement.