BLW 302 Ch.16

Statute of Frauds

Statute of Frauds

Requires certain types of contracts be evidenced by a signed writing in order to be enforceable

Contracts that require a writing

Marriage

Year (contracts can’t be performed w/in a year)

Land

Executor

Goods

Surety

Contracts Involving Interests in Land

A contract for the sale of
land is not enforceable unless it is in writing.

• Land is real property and includes all physical objects that are permanently attached to the soil

One-Year Rule

A contract that cannot, by its own terms, be performed within one year from the date it was formed must be in writing

Collateral Promises

• A promise to pay another person’s debt that is not conditioned on the person’s failure to pay (or perform) is a primary obligation.

• A promise to pay another’s debt only if that party fails to pay is a secondary obligation – Must be in Writing.

• Promise to pay the debt of another

“Main Purpose” Rule

• An oral promise to answer for the debt of another is covered by the Statute of Frauds unless the guarantor’s main purpose is to secure a personal benefit.

• This type of contract does not need to be in writing.

Debtor

person that owes the obligation

Creditor

person to whom the Debtor owes the obligation

Third Party

Person that promises to pay the Debtor’s obligation

Promises Made in Consideration of Marriage

• A unilateral promise to make a monetary payment or give property in consideration of a promise to marry must be in writing.

• Prenuptial agreements must be in writing to be enforceable

Contracts for the Sale of Goods

The Uniform Commercial Code (UCC) requires written evidence or an electronic record of a contract for the sale of goods priced at $500 or more

• A writing that satisfies the UCC requirement only needs to state the quantity term.

• Other agreed-on terms can be omitted or stated imprecisely in the writing—as long as both parties’ intentions adequately are reflected.

Partial Performance

When the contract has been partially performed, a court may grant specific performance, an equitable remedy that requires performance of the contract according to its precise terms

Admissions

If a party against whom enforcement of an oral contract is sought “admits” under oath that a contract for sale was made, the contract will be enforceable

Promissory Estoppel

If a person justifiably relies on another’s promise to their detriment, a court may estop (prevent) the promisor from denying that a contract exists

Promissory Estoppel Special Exceptions

Oral contracts for customized goods may be enforced in certain circumstances

Writing

Can consist of any order confirmation, invoice,
sales slip, check, fax, or e-mail—or a combination of these items.

• The written contract can consist of multiple documents that are physically attached or placed in the same envelope

What must be contained in the writing?

• quantity

• signed by party to be charged (being enforced against)

• names of parties,

• subject matter, and

• consideration

Parol Evidence Rule

If a court finds that a written contract represents the complete and final statement of the parties’ agreement, neither party is allowed to present parol evidence

A party normally cannot present any evidence of the following if it contradicts or varies the terms of the written contract

• Negotiations prior to contract formation.

• Agreements prior to contract formation.

• Oral agreements contemporaneous with (at the same time as) contract formation

Exceptions to the Parol Evidence Rule

• Contracts subsequently modified.

• Voidable or void contract.

• Contracts containing ambiguous terms.
  CASE 16.3 Frewil, LLC v. Price (2015)

• Incomplete contracts

• Prior dealing, course of performance, usage of trade.

• Contracts subject to orally agreed-on conditions precedent.

• Contracts with an obvious or gross clerical error

Integrated Contracts

A contract that is intended to be the complete and final statement of the terms of the agreement

Completely Integrated

Contains all of the terms of the parties’ agreement

Partially integrated

Contains some of the terms that the parties agreed on but not others