Ch 16 Written Contracts Flashcards
The Common Law Statute of Frauds: Contracts That Must Be in Writing
The Statute of Frauds requires certain agreements to be in writing to be enforceable. The agreements that must be in writing are those:
-For the transfer of an interest in land,
-That cannot be performed within one year,
-In which a party promises to pay the debt of another,
-Made by an executor of an estate to pay a debt of the estate,
-Made in consideration of marriage, and
-For the sale of goods of $500 or more
Once a contract is fully executed, it makes no difference that it was unwritten.
Agreements for an Interest in Land
(Exception: Full Performance by the Seller, Exception: Part Performance by the Buyer, Exception: Promissory Estoppel)
A contract for the transfer of any interest in land must be in writing to be enforceable.
- Exception: Full Performance by the Seller
-If the seller completely performs her side of a contract for an interest in land, a court is likely to enforce the agreement even if it was oral. - Exception: Part Performance by the Buyer
-The buyer of land may be able to enforce an oral contract if she paid part of the purchase price and either entered upon the land or made improvements to it. - Exception: Promissory Estoppel
- If a promisor makes an oral promise that should reasonably cause the promisee to rely on it, and the promisee does rely, the promisee may be able to enforce the promise,
Agreements That Cannot Be Performed within One Year
Contracts that cannot be performed within one year are unenforceable unless they are in writing.
Promise to Pay the Debt of Another
(Exception: The Leading Object Rule)
When one person agrees to pay the debt of another as a favor to that debtor, it is called a collateral promise, and it must be in writing to be enforceable
- Exception: The Leading Object Rule
There is one major exception to the collateral promise rule.
-When the promisor guarantees to pay the debt of another and the leading object of the promise is some benefit to the promisor himself, then the contract will be enforceable even if unwritten.
Promise Made by an Executor of an Estate
An executor’s promise to use her own funds to pay a debt of the deceased must be in writing to be enforceable.
Promise Made in Consideration of Marriage
a promise made in consideration of marriage must be in writing to be enforceable.
The Common Law Statute of Frauds: What Is a “Writing”?
-Be signed by the defendant; and
-state with reasonable certainty the name of each party, the subject matter of the agreement, and all of the essential terms and promises.
Signature
A state’s Statute of Frauds typically requires that the writing be “signed by the party to be charged therewith”; that is, the party who is resisting enforcement of the contract.
Reasonable Certainty
example:
A perfectly adequate memorandum might say, “Garfield agrees to sell Hayes his condominium at 234 Baron Boulevard, Apartment 18, for $350,000 cash, payable on June 18, 2025, and Hayes promises to pay the sum on that day.” They should make two copies of their agreement and sign both. Notice that although Garfield’s memo is short, it is certain and complete. This is critical because problems of vagueness and incompleteness often doom informal memoranda.
Vagueness
example:
Ella Hayden owned valuable commercial property on a highway called Route 9. She wrote a series of letters to her stepson Mark, promising that several of the children, including Mark, would share the property. One letter said: “We four shall fairly divide on the Route 9 property [sic].” Other letters said: “When the Route 9 Plaza is sold, you can take a long vacation” and “The property will be sold.
Incompleteness
(Electronic Contracts and Signatures)
The Statute of Frauds requires some sort of “signature” to prove that the defendant committed to the deal. Today, an “electronic signature” could mean a name typed (or automatically included) at the bottom of an email message, a retinal or vocal scan, or a name signed by electronic pen on a writing tablet, among others.
-valid in all 50 states
The UCC’s Statute of Frauds
The UCC requires a writing for the sale of goods priced $500 or more.
-UCC §2-201, the Statute of Frauds section, has three important elements:
1. The basic rule
2. The merchants’ exception
3. Special circumstances
UCC §2-201(1)—The Basic Rule
(UCC §2-201(2)—The Merchants’ Exception, UCC §2-201(3)—Special Circumstances)
A contract for the sale of goods of $500 or more is not enforceable unless there is some writing, signed by the defendant, indicating that the parties reached an agreement.
(2)
Within a reasonable time of making an oral contract, if a merchant sends a written confirmation to another, and if the confirmation is definite enough to bind the sender herself, then the merchant who receives the confirmation will also be bound by it unless he objects in writing within ten days.
(3)
An oral contract may be enforceable, even without a written memorandum, if:
- the seller is specially manufacturing the goods for the buyer, or
- the defendant admits in court proceedings that there was a contract, or
- the goods have been delivered or they have been paid for.
- Specially Manufacted Goods
- Admissions in Court
- Good Delivered or Paid For.
Parol Evidence
- integrated contract: A writing that the parties intend as the final, complete expression of their agreement
-The parol evidence rule: When two parties make an integrated contract, neither one may use parol evidence to contradict, vary, or add to its terms.
Exception: An Incomplete or Ambiguous Contract
If a court determines that a written contract is incomplete or ambiguous, it will permit parol evidence.
