4. SOF

Question 1

What does the Statute of Frauds require for certain contracts?

Answer 1

1. A writing; and
2. a signature by the party against whom enforcement is sought.

Question 2

In litigation, how can the Statute of Frauds be used as a defense?

Answer 2

It can be raised against a party claiming breach of contract if the transaction falls within its categories and the writing is absent or deficient.

Question 3

What are the three questions to analyze a Statute of Frauds problem?

Answer 3

1. Does the agreement fall within the Statute of Frauds?
   -The Statute of Frauds ONLY governs certain categories of contracts/agreements; thus, if the subject matter of the agreement does NOT fall under the Statute of Frauds, then the Statute of Frauds will NOT apply.
   -If the agreement does fall under the Statute of Frauds, it is necessary to proceed further with the analysis.
2. Is the Statute of Frauds satisfied?
   -If an agreement is within the Statute of Frauds, then the key question is whether the Statute’s writing requirement is met.
   -If the signed writing requirement is met and the Statute is satisfied, then the Statute of Frauds will not render the contract unenforceable.
   -If the contract is within the subject matter of the Statute of Frauds but the Statute is not satisfied, then the party seeking to enforce the contract will lose.
3. Is alternative enforcement available?
   -If the contract is within the Statute of Frauds, but the Statute is not satisfied, the party seeking to enforce the contract will have to use another theory of enforcement, such as promissory estoppel or quasi-contract, in order to protect its interests.

Question 4

What are the six categories of agreements governed by the Statute of Frauds that require a writing?

Answer 4

1. Contract upon consideration of marriage
2. Contract not completed within one year
3. Contract for the sale of an interest in land
4. Contract of an executor or administrator for a decedent’s duty
5. Guaranty or suretyship agreement
6. Contract for the sale of goods at a price of $500 or more.

Question 5

How is the one-year period measured under the Statute of Frauds?

Answer 5

From the date of the contract’s formation rather than the start of performance.

Question 6

Can a contract that contemplates a duration of less than a year fall under the Statute of Frauds?

Answer 6

Yes, if performance is not completed until more than one year after formation.

Question 7

Contract does not specify a date on which performance is to be completed

Answer 7

When a contract does not specify a date by which performance is to be completed, the question of whether a particular contract is to be performed within one year of the making thereof is answered by determining whether it is at all possible to complete the required performance within a year’s time.

Question 8

Lifetime or permanent contract of employment governed by the one-year provision

Answer 8

a lifetime or permanent contract of employment is NOT governed by the one-year provision because the employee’s death is possible within the first year, resulting in termination of the contract without breach.

Question 9

What is required for a guaranty or suretyship agreement to be valid under the Statute of Frauds?

Answer 9

The general rule that a promise to answer for the debt of a third party(guarantor’s promise is to protect economic interests of the third party): a suretyship or guaranty agreement, is subject to the Statute of Frauds and MUST be in writing.

Question 10

What are the two exceptions where a guaranty/suretyship agreement is not governed by the Statute of Frauds(no signed writing is required)?

Answer 10

• When the creditor discharges the original debtor based on a guarantee
• When the principal purpose of the guarantee benefits the promisor and NOT the third-party debtor.

Question 11

What are the two requirements for satisfaction of the Statute of Frauds?

Answer 11

• A writing
• The writing must be signed.

Question 12

What is the writing requirement for the Statute of Frauds?

Answer 12

There is NO requirement that the parties put their actual agreement in writing; rather, all that is necessary is that the writing be a memorandum that can be prepared before, during, or after contract formation

Question 13

What types of memorandums can satisfy the writing requirement under the Statute of Frauds?

Answer 13

• A letter from one party to a third party describing the agreement
• The written offer or acceptance
• A letter from one party admitting the agreement.

Question 14

Memorandum Terms

The memorandum need not document the transaction in detail. ONLY the following terms are required:

Answer 14

1. the identity of the parties to the transaction;
2. the nature and subject matter of the contract; and
3. the essential terms of the unperformed promises in the agreement.

Question 15

The Signature Requirement

Answer 15

The actual signature of the party against whom enforcement is sought is NOT necessary.

Any symbol, including initials; typed, stamped, or preprinted signatures; or letterhead, if used with the intention to authenticate the writing, will suffice.

Question 16

What is the significance of ‘tacking together’ multiple documents?

Answer 16

The writing need not be a single document; a party may satisfy the Statute by tacking together several documents which, once combined, satisfy all the necessary requirements for the Statute of Frauds.

The signature requirement is satisfied if:
i.) all of the documents are signed by the party against whom the contract is being Enforced;
or
ii.) a signed document incorporates unsigned documents by reference.

Question 17

If unsigned documents are not incorporated by reference in a signed document, “tacking together” the signed and unsigned documents to satisfy the Statute of Frauds is nevertheless permissible if:

Answer 17

i.) there is at least one signed writing unambiguously establishing a contractual relationship between the parties;

ii.) the signed and unsigned documents clearly refer to the same subject matter; and

iii.). there is clear and convincing evidence of acquiescence to the unsigned documents by the party against whom enforcement is sought.

Question 18

What is the rule regarding part performance for land-sale contracts?

Part Performance NOT Allowed

Answer 18

Part performance makes an oral contract enforceable:

1. in actions by the buyer against the seller; or
2. in actions for specific performance.

Part performance is not allowed:
1. in actions by the seller against the buyer; or
2. actions for money damages.

Question 19

Full Performance of an oral contract for services by the Party performing the services in a One-Year Contracts

Answer 19

Full performance of an oral contract for services by the party performing the services will make the contract enforceable against the paying party.

part performance is NOT compensable on the contract.

performing party may be able to recover for the reasonable value of the services actually rendered via quantum meruit.

Question 20

What can an aggrieved party seek if a contract is unenforceable under the Statute of Frauds?

Answer 20

• Restitution for conferred benefits
• Reasonable value of services under quantum meruit.

Question 21

If a party incurs losses due to an oral contract unenforceable by the Statute of Frauds, they may recover damages through promissory estoppel, especially if

Answer 21

they relied on false assurances of a signed writing to satisfy the Statute. Without such assurances, reliance must be on the contract itself.

Question 22

What governs agreements for the sale of goods under the UCC Statute of Frauds?

Answer 22

Agreements for the sale of goods for the price of $500 or more.

Question 23

What happens if a contract under the UCC is not satisfied?

Answer 23

The entirety of the contract is unenforceable, not just the portion exceeding $499.99.

Question 24

What are the five ways to satisfy the UCC Statute of Frauds?

Answer 24

1. Signed writing
2. Merchant’s confirmation
3. In-court admission
4. Part-performance
5. Substantial reliance by the seller of specially manufactured goods.

Question 25

The easiest way to satisfy the UCC Statute of Frauds, a signed writing requires:

Answer 25

(1) a writing;
(2) that is signed by the party against whom enforcement is sought;
(3) Quantity;
(4) sufficient to indicate that a contract for sale has been made between the parties.

It doesn’t matter if a term is incorrectly stated.

Question 26

If there is no quantity term, the contract is altogether unenforceable, subject to two exceptions:

Answer 26

1. where other language in the writing provides an unambiguous basis for measuring quantity; and
2. In the case of output and requirements contracts, the expression “output,” “requirements,” or their equivalent satisfies the quantity requirement under the UCC.

Question 27

What is the rule regarding merchant’s confirmation under UCC?

Answer 27

A written confirmation sent within a reasonable time binds the recipient if they knew of its contents and failed to object within 10 days.

Question 28

What is the rule for in-court admission under UCC?

Answer 28

An admission in court that a contract for sale was made satisfies the Statute of Frauds.

Question 29

What does part performance under UCC allow?

Answer 29

Despite the absence of a signed writing, an otherwise valid contract is enforceable with respect to:

i.) goods for which buyer makes the payment and the seller accepts it;

ii.) goods for which seller makes the delivery and the buyer accepts the goods.

The Part performance exception does NOT apply UNLESS there are actions by both parties indicating that a contract for sale exists

Question 30

Divisible Goods-Part Performance

Answer 30

If the contract in question involves divisible goods (e.g., widgets), part performance secures enforcement for any quantity that has already been paid for by the buyer or delivered by the seller, the contract is NOT enforceable beyond that quantity.

Question 31

Indivisible Goods-Part Performance

Answer 31

If the contract in question involves an indivisible good (e.g., a speedboat) the majority rule holds that partial payment secures enforcement of the entire contract.

Question 32

What is required for substantial reliance by the seller of specially manufactured goods?

Answer 32

An aggrieved seller can secure enforcement of an oral contract by establishing the following elements:

i.) the goods are to be specially manufactured for the buyer;

ii.) the goods are not suitable for sale to others in the ordinary course of the seller’s business;

iii.) the seller has substantially begun to manufacture, or made commitments to procure the goods;

iv.) the actions undertaken to begin to manufacture or procure occurred under circumstances that reasonably indicate that the goods are for the buyer; and

v.) the actions undertaken to begin to manufacture or procure occurred before the seller received notice of the buyer’s revocation.

Question 33

What is the effect of satisfying the Statute of Frauds?

Answer 33

An otherwise valid contract can still be unenforceable if it does not satisfy the Statute of Frauds.

Question 34

What is the effect of satisfying the Statute of Frauds?

Answer 34

Satisfying the Statute of Frauds is necessary but not sufficient alone to enforce a contract.

The aggrieved party must establish both a valid contract and a breach thereof to succeed on his claim.

Question 35

Can a contract be unenforceable under the Statute of Frauds even if it has offer, acceptance, and consideration?

Answer 35

Yes, an otherwise valid contract can be unenforceable if it does not satisfy the Statute of Frauds.

This situation arises when the contract is covered by the Statute of Frauds but fails to meet its requirements.

Question 36

True or False: Both parties must sign a writing for the Statute of Frauds to apply.

Answer 36

False.

The Statute of Frauds only requires that the party against whom enforcement is sought has signed.

Question 37

What happens if only one party signs the writing evidencing the contract?

Answer 37

The contract will be enforceable against the signing party but not against the non-signing party.

This demonstrates the lack of mutuality of obligation under the Statute of Frauds.

Question 38

What is the only effect of a successful Statute of Frauds defense?

Answer 38

To defeat enforcement of the contract against the non-signing party.

The contract may still be valid and enforceable for other purposes.

Question 39

List three purposes for which a contract may still provide evidence despite a successful Statute of Frauds defense.

Answer 39

• Establishing an element of a legal claim apart from breach of contract
• Providing evidence establishing a defense to a legal claim apart from breach
• Evidence of the value of services already rendered

Question 40

Fill in the blank: Satisfaction of the Statute of Frauds does not ensure a __________.

Answer 40

[win].