6. Statute of Frauds

Question 1

What is required for an agreement to fall within SOF?

Answer 1

1) Writing (reasonably identifies)
- Subject matter
- Contract
- Essential terms (quantity of goods; price + description of land)

2) Signed by party to be ‘charged’
- Handwritten/Printed/Electronic/Initials

Question 2

When do probationary agreements require writing?

Answer 2

1) Executor/Administrator promises to pay estate’s debts

2) Using ‘own’ funds

Question 3

When do surety agreements require writing?

Answer 3

Surety promises to pay ‘if Debtor does NOT repay loan’ to Creditor

NOT for Surety’s pecuniary gain

NOT Creditor’s discharge of Debtor with reliance on surety agreement

Question 4

When do marriage agreements require writing?

Answer 4

Promise in consideration of marriage

- E.g. Prenuptial agreements

Question 5

When do land interests require writing?

Answer 5

Land sale transactions

Leases/Easements (more than 1 year)

Mortgages/Fixtures/Buyer’s severance of structures

Question 6

When do land interests not require writing?

Answer 6

Land sale transactions: Seller’s full performance

Land sale transactions: Buyer’s part performance (at least 2/3 elements required)

• Payment (whole/part)
• Possession
• Valuable improvements

Construction/Instalment contract

Broker’s contract (finding buyers)

Question 7

When do service contracts require writing?

Answer 7

1) Express terms: Not performable within one year (at least one year)
2) From date of agreement (NOT performance)

Question 8

When do service contracts not require writing?

Answer 8

Full performance

Lifetime employment contracts
- Employee may die before one year

Question 9

When do sale of goods contracts require writing?

Answer 9

$500 or more

- Enforceable up to quantity in writing

Question 10

When do sale of goods contracts not require writing?

Answer 10

Specially manufactured goods (part performance)

1) Specially manufactured for Buyer
2) NOT for sale in Seller’s ordinary course of business
3) Seller made substantial part performance/committed to purchase before repudiation notice received

Part payment/delivery
- Enforceable up to paid/delivered quantity

Judicial admission by defendant

• Testimony/Pleading
• Enforceable up to admitted quantity

Merchant Confirmatory Memorandum Rule

1) BOTH merchants
2) Written confirmation sent to recipient (within reasonable time after contract made)
3) Recipient has reason to know confirmation’s contents
4) Recipient fails to respond within 10 days (in writing)
- NO writing required

Question 11

What exceptions do not require writing?

Answer 11

Promissory estoppel

- Inequitable to allow SOF to defeat claim with merit

Question 12

Do oral modifications require writing?

Answer 12

Common law

• If modified contract falls within SOF => Signed writing required
• If contract requires written modifications BUT modified contract does NOT fall within SOF => NO signed writing required

Article 2

• If modified contract falls within SOF => Signed writing required
• If contract requires written modifications BUT modified contract does NOT fall within SOF => Signed writing required
• Other party detrimentally relied on oral modification => Waiver of original terms (unless retracted + no detrimental reliance)

Question 13

What are charged party’s options if the agreement is not within SOF?

Answer 13

Enforce

NOT enforce

Fail to enforce SOF as defence => Waiver

Question 14

What are the charging party’s remedies if the agreement is within SOF?

Answer 14

Enforce

Sue;

• Reasonable value of services
• Part performance rendered
• Restitution of conferred benefit
• Expectation damages (part performance only)

Question 15

What are the charging party’s remedies even if the agreement is not within SOF?

Answer 15

Sue

• Reasonable value of services
• Part performance (quasi-contract recovery)
• Restitution of conferred benefit

Question 16

When must the writing be created?

Answer 16

Before/After contract formation