Contracts: Formal Requirements

Question 1

The statute of frauds restricts oral agreements and requires agreements in writing if…

Answer 1

1) they cannot be performed within a year (but this requirement may be dying out.)
2) Contracts for goods over $500
3) Contracts conveying an interest in land

Professional Bull Riders, Inc. v. AutoZone, Inc.
Facts: Plaintiff had an unsigned service contract, to perform for two years with an option to terminate before one year was over. Plaintiff claims the option is alternate performance and shouldn’t be subject to the Statute of Frauds, defendant claims its liquidated damages and it should be unenforceable under the Statute of Frauds.
Rule: As long as a contract is technically able to be performed in under a year it is not subject to the statute of frauds

Sullivan v. Porter
Facts: Plaintiff orally agreed to sell land to defendant. Defendant paid some of the money and began work on the land which the plaintiff was aware of. Plaintiff then wanted to void the sale under the statute of frauds.
Rule: An exception to the statute of frauds is if one party partially performs due to a misrepresentation by the other then an oral contract is enforceable.

Question 2

Cases for statute of frauds

Answer 2

Professional Bull Riders, Inc. v. AutoZone, Inc.
Facts: Plaintiff had an unsigned service contract, to perform for two years with an option to terminate before one year was over. Plaintiff claims the option is alternate performance and shouldn’t be subject to the Statute of Frauds, defendant claims its liquidated damages and it should be unenforceable under the Statute of Frauds.
Rule: As long as a contract is technically able to be performed in under a year it is not subject to the statute of frauds

Sullivan v. Porter
Facts: Plaintiff orally agreed to sell land to defendant. Defendant paid some of the money and began work on the land which the plaintiff was aware of. Plaintiff then wanted to void the sale under the statute of frauds.
Rule: An exception to the statute of frauds is if one party partially performs due to a misrepresentation by the other then an oral contract is enforceable.

Question 3

Capacity: Some parties are incapable of forming intent that is requisite to contract.
What are the two most common categories of people deemed incompetent to form contracts?

Answer 3

Minors
Bowling v. Sperry
Facts: Plaintiff a minor, went to a car salesman accompanied by his aunt to look at cars. The plaintiff than returned alone and bought the car from defendant, with money he borrowed from his aunt. Plaintiff then wanted to give it back and void the sale
Rule (1): Contracts with minors are voidable even if there is reason to believe that an adult is supervising the minor.
Rule (2): Contracts with minors can be enforceable if the contracted good is a necessity to the minor.

Mental Incompetence
Heights Realty, Ltd. v. E.A. Phillips
Facts: Defendant, an 84 yr old lacking mental capacity to contract, haphazardly contracted her exclusive listing for her house to plaintiff without any terms except. Defendant then refused to pay the commission. Courts found that plaintiff should have reasonably seen that defendant lacked the capacity to contract due to the haphazardness of the agreement.
Rule: Mental capacity that one could have reasonable seen at the contract formation can be grounds for voiding.