CH16 Business Law by Beatty Samuelson Abril 8th Edition

Question 1

CH16 What was a deed called in the 1700’s?

Answer 1

A patent.

P 389

Question 2

CH16 What was the purpose of the Statute of Frauds?

Answer 2

To provide the courts the best possible evidence of whether the parties intended to make a contract.

To provide the court the best possible evidence of the parties’ intentions.

P 390

Question 3

CH16 What 6 types of agreements must be in writing? (Statute of Frauds) (6)

Answer 3

Transfer of land.
That cannot be performed in 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.
For the sale of goods of $500 or more.

P 390

Question 4

CH16 What is required for a contract to be enforced (Statue of Frauds)?

Answer 4

Of the six types of Statute of Frauds agreements, the agreement or a memorandum of the agreement, is:

in writing

signed by the defendant.

P 390

Question 5

CH16 What is an executory contract?

Answer 5

One where the parties have not fulfilled their obligations.

P 390

Question 6

CH16 What if a fully executed contract is not in writing?

Answer 6

It makes no difference, the contract, once fully executed, is not illegal. Neither party may then demand recission.

P 390

Question 7

CH16 Which does the Statute of Frauds allow?

A party to cancel future obligations.

A party to cancel past obligations.

Both.

Neither.

Answer 7

The party may cancel future obligations. Past, completed obligations may not be undone.

P 390

Question 8

CH16 Define the following contracts:

Valid
Unenforceable
Voidable
Void

Answer 8

Valid - satisfies all of the law’s requirements. Offer, acceptance, consideration, legality, capacity, consent, writing. p 281

Unenforceable - the court declares that the rule of law prevents enforcing the contract.

Voidable - when the law permits one party to terminate the agreement.

Void - neither party can enforce the contract. Often illegal purpose or one party has no legal authority.

P 285

Question 9

CH16 What does interest in land mean?

Answer 9

Any legal right regarding land.

P 390

Question 10

CH16 Name 4 interests in land.

Answer 10

Any legal right regarding land:

A house on a lot.

A mortgage.

An easement.

A leased apartment.

P 390

Question 11

CH16 What is the length of a short term lease?

Answer 11

One year or less.

P 390

Question 12

CH16 What is a cooperative?

What is the result of a cooperative?

Answer 12

A cooperative apartment is an interest in land.

A lease may be in one person’s name, but if the other person(s) split all expenses it becomes a cooperative.

Each tenant has the option of buying the property.

P 390-391

Question 13

CH16 What is an easement?

Does it require a written contract?

Answer 13

An easement is a legal right that an owner gives to another person to make some use of the owner’s land.

Yes, it requires a written contract to be enforceable.

P 391

Question 14

CH16 Name three exceptions to an oral contract regarding an interest in land that should have been in writing.

Answer 14

Exception: Full performance by the seller.

Exception: Partial performance by the buyer. If the buyer paid part of the price and either entered upon the land or made improvements to it.

Exception: Promissory Estoppel. If a promisor makes an oral promise that should reasonable cause the promisee to rely on it, and the promisee does rely, the promisee may be able to enforce the promise. see 289-91, 337-8, 334, 459-61, 392.

P 392

Question 15

CH16 What are the 3 conditions of Promissory Estoppel?

Answer 15

The defendant made a promise knowing the plaintiff would likely rely on it.

The plaintiff did rely on the promise.

The only way to avoid injustice is to enforce the promise.

P 290

Question 16

CH16 Contracts that cannot be performed within one year are unenforceable unless:

Under what condition could it be enforceable?

If a contract will necessarily take more than a year to finish, it:

Answer 16

They are in writing.

If the contract could possibly be completed within one year.

Must be in writing.

P 392

Question 17

CH16 If you hire a band to play at your wedding 15 months from when the arrangement was made with the band, the contract must be:

Answer 17

In writing. It is more than 12 months from now.

P 393

Question 18

CH16 Two people agree to buy lottery tickets together and evenly share the winnings if they win. They win the lottery a number of years after they make this agreement. The person who had bought the ticket tried to claim all of the money for themselves. This went to court. Who won and why?

Answer 18

Statute of Frauds states that the contract must have the ability to be satisfied in a year.

They could possibly have won in the first year.

Therefore the Statute of Frauds does not apply, the person holding the winnings must pay the other.

P 393

Question 19

CH16 What is a Collateral Promise?

How is it enforceable?

Answer 19

It must be in writing to be enforceable.

P 394

Question 20

CH16 Exception: What is the Leading Object Rule?

Answer 20

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.

It the leading object of a promise was based on self-interest, an oral promise is fully enforceable.

P 394

Question 21

CH16 Exception: Promise Made by an Executor of an Estate. What does the statute of frauds state in regards to the executor

paying estate debt with their own funds?

Answer 21

An executor’s promise to use her own funds to pay a debt of the deceased must be in writing to be enforceable.

P 395

Question 22

CH16 Promise Made in Consideration of Marriage. What is required of this type of promise?

Answer 22

It must be made in writing to be enforceable.

P 395

Question 23

CH16 The Common Law Statute of Frauds - What is a “writing?” (6)

Answer 23

The contract may be formal or informal.

It must be in writing.

It must be signed by the defendant.

It must state with reasonable certainty the name of each party,

the subject matter of the agreement

and all of the essential terms and promises.

P 395

Question 24

CH16 Explain a Signature.

Answer 24

A state’s Statute of Frauds typically requires that the writing be signed by the party to be charged therewith.

The party to be charged therewith is the party who is resisting the contract.

Judges tend to define signature very broadly.

It can be signed with a pen or a stamp.

Electronic signature.

P 396

Question 25

CH16 What is Reasonable Certainty? (3) plus see the (7) on page 396.

Answer 25

In the case of informal memoranda, the memo must be certain and complete.

All of the necessary details must be in it to be a formal agreement.

It must not be vague or incomplete. It must be clear and complete.

See page 281 for the 7 key characteristics of a contract.

Remember that per the Statute of Frauds contracts must be in writing if the agreed upon term is over one year.

P 396

Question 26

CH16 UCC Uniform Commercial Code contracts only involves:

Answer 26

the sale of goods.

P 398

Question 27

CH16 UCC code is easier to meet than

Answer 27

common law.

P 398

Question 28

CH16 What are the 3 elements of UCC code Statute of Frauds?

Answer 28

The basic rule

The merchants exception

Special circumstances

P 398

Question 29

CH16 What does the UCC code not require in a contract that common law does require?

Answer 29

It does not require all of the terms of the agreement be in writing.

P 398

Question 30

CH16 What is the UCC Code looking for in a contract?

Answer 30

That there is an indication that the parties reached an agreement.

P 398

Question 31

CH16 What two things are required to be in a UCC code $500 or more contract?

Answer 31

The signature of the defendant and the quantity of goods being sold.

P 398

Question 32

CH16 Merchants Exception:

Answer 32

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 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.

P 400

Question 33

CH16 UCC Code Merchant’s Exception: What can a writing create?

Answer 33

a binding contract even when it is not signed by the defendant.

P 400

Question 34

CH16 UCC Contract Special Circumstances:

Answer 34

An oral contract may be enforceable, even without a written memorandum if:

The seller is specially manufacturing the goods for the buyer

The defendant admits in court proceedings that there was a contract

The goods have been delivered or they have been paid for

P 400

Question 35

CH16 UCC fact:

If the seller has delivered the goods or the buyer has paid for them,

the contract may be enforced even with nothing in writing.

Question 36

CH16 Parol Evidence Rule:

Answer 36

When two parties make an integrated contract,

neither one may use parol evidence to contradict, vary or add to its terms.

P 402

Question 37

CH16 Exception: An Incomplete or Ambiguous Contract

Answer 37

If a court determines that a written contract is incomplete or ambiguous, it will permit parol evidence.

Question 38

CH16 Exception: Fraud, Misrepresentation or Duress

Answer 38

A court will permit parol evidence of fraud, misrepresentation or duress.

P 403