Contracts

Defenses to Contract Enforcement

• A contract defense is a legal argument used to avoid enforcement of a validly formed contract (offer, acceptance, consideration).
• The defendant is arguing that the contract should not be enforced due to a viable defense.
• Before considering defenses, one must determine if there is a validly formed contract.

Statute of Frauds

• Contracts within the scope of the Statute of Frauds must be in writing to be enforceable.
• This requirement exists because these contracts are particularly susceptible to fraud.
• A written contract provides greater evidence of the agreement's existence.

Scope of the Statute of Frauds (MY LEGS Mnemonic)

• Marriage: Contracts in consideration of marriage, such as prenuptial or postnuptial agreements.
  • These are covered because of the potential for disputes after marriage, leading to perjury.
  • Promises to marry are not covered.
• Year: Contracts that can not possibly be performed within one year from today's date.
  • Oral agreements for exactly one year or less are not covered.
  • Long-term contracts extending beyond one year are covered.
  • The concern is that memories fade and opportunities arise to fabricate obligations.
    • Example: An oral employment contract for three years is subject to the Statute of Frauds.
    • Example: Lifetime employment contracts generally fall outside the Statute of Frauds, as the employee could die within a year.
    • Example: Taylor Swift concert contracts fall under the statute of frauds.
  • Tasks generally do not trigger the Statute of Frauds unless the dates indicate performance will take over a year.
• Land: Land sale contracts and most interests in land, including transfers of interest exceeding one year.
  • This includes easements and leases longer than one year, which should be in writing.
  • A contract to build a house on land is typically not covered unless the required dates extend beyond one year.
• Executor: Promises by an estate executor to pay estate debts from their own funds.
  • Such promises must be in writing to be enforceable.
  • Typically it's the estate, not the executor, that pays the debts.
• Goods: Sale of goods for $500$ or more, subject to U.C.C. Article 2 Statute of Frauds requirements (U.C.C. Section 2-201).
  • Requires a writing sufficient to show agreement and specify quantity.
    • Example: A Toyota worth $500$ is subject to the statute of frauds. A Toyota worth $400$ is not.
  • Article 2 applies to all sales of goods.
• Surety: A guarantor of another person’s debt (