In-Depth Notes on Writing in Contract Law

Chapter 16: Writing in Contract Law

Introduction to Statute of Frauds

• The Statute of Frauds requires certain contracts to be in writing to prevent fraud and perjury.
• Originally enacted in 1677, it mandates that specific kinds of contracts must have written evidence to be enforceable, due to the risk of fraud in oral agreements.

Key Questions Regarding Moore's Case

• Enforceability of Oral Promises: Was Moore's promise to cover dishonored checks enforceable?
• Requirements for Enforceability: What kind of writing would be required for the promise to be enforceable?
• Written Agreement's Scope: If there had been a written contract, could Moore’s oral promises still be enforced?
• Ethical Obligations: Would it be ethical for Moore not to pay the bank?

Learning Objectives

• Contracts Requiring Writing: Identify contracts that must be in writing under the Statute of Frauds.
• Exceptions: Explain exceptions to the Statute of Frauds.
• Satisfying the Statute: Describe how to satisfy the statute under common law and UCC.
• Parol Evidence Rule: Understand the parol evidence rule and its exceptions.

Significance of Writing in Contract Law

• No general requirement for contracts to be in writing; oral contracts can be enforceable.
• Written contracts are preferable due to ease of proof, clarity, and reduced misunderstandings.
• Authenticity and Insurance: A signature provides authenticity, aiding in contract enforcement.

Statute of Frauds Overview

• History and Purpose: Created to address problems with oral contracts and prevent perjury in English courts.

Violating the Statute of Frauds

• Applies only to executory contracts; a fully performed oral contract cannot be rescinded due to noncompliance with the statute.
• Noncompliance results in unenforceability, not illegality. Remedies may still exist through quasi-contract claims.

Contracts Covered by the Statute of Frauds

1. Collateral Contracts: Promises to pay third-party debts must be in writing.
2. Real Estate Contracts: Includes sales, mortgages, and leases over a year.
3. Contracts Longer Than 1 Year: Bilateral contracts not finished within a year must be documented.
4. Sale of Goods: Contracts for goods priced at $500 or more.
5. Executor's Promise: Personal liability for estate debts requires a written agreement.
6. Marriage Consideration: Contracts dependent on marriage must be written.

Collateral Contracts

• Definition: A collateral contract involves a guarantor promising to cover another’s debt.
• Examples: guarantor and principal debtor relationship must be in writing.

Main Purpose Rule

• An exception allows oral guarantees for personal advantage without written form.

Interests in Land

• Contracts affecting real estate require written evidence due to societal values on land ownership.
• Lease Exceptions: Short-term leases may not require writing.

Performance Exceptions

• If a vendor fully performs an oral real estate contract, it becomes enforceable.
• Part Performance Doctrine: Vendee can enforce oral contracts if they reasonably relied on it and incurred changes in position.

Year Provision

• Contracts that can't be performed within one year require writing to be enforceable.
• Flexible interpretation as long as terms don’t explicitly state otherwise.

Sale of Goods under UCC

• UCC § 2-201: Contracts for sale of goods priced at $500 or more must be in writing.
• Modifications also must meet these requirements if they exceed the price threshold.

Exceptions to Statute of Frauds

1. Confirmatory Memorandum: For contracts between merchants based on oral agreements.
2. Part Payment/Delivery: Any acceptance of part payment or receipt of part goods meets requirements.
3. Admissions: When parties admit to the existence of a contract in court.
4. Specially Manufactured Goods: No writing required for goods that cannot be resold due to their unique nature.

Parol Evidence Rule

Key Definitions

• Parol Evidence: Statements not included in the written contract.
• Courts do not allow prior or contemporaneous oral statements to contradict written terms if the writing is intended as complete.

Scope and Admissibility

• Exceptions where parol evidence is admissible include:
  • Additional terms in partially integrated contracts.
  • Ambiguities requiring clarification.
  • Circumstances invalidating contracts.
  • Proof of conditions requiring evidence.
  • Subsequent modifications.

Ethical Considerations in Contracts

• Emphasizes the importance of both legal and ethical standards in enforcing contracts.

These notes summarize key concepts related to writing in contract law, particularly the significance of the Statute of Frauds and the parol evidence rule. Understanding these principles is vital for contract enforceability and business ethics.