Module 10 Flashcards
What does a statute of frauds say about electronic records?
It allows them to satisfy the requirement of a writing if certain conditions are met, and the parties have agreed to communicate electronically
What is the statute of frauds?
Says that certain kinds of contracts must be in writing (notes and memos of agreement are allowed) and should be signed by the party being charged/the party’s agent
What is a suretyship contract?
Guarantee of payment or performance is another fails to pay
What is a promise of suretyship by an executor or administrator?
Promised answer damages out of your own estate and within the statute of frauds meaning that a record is required
What are the two different types of promise to answer for the obligation of another suretyship contracts?
- collateral
- original
What is the collateral promise to answer for the obligation of another?
When an oral promise contravenes the statute of frauds because there is no record
What is an original promise to answer for the obligation of another?
When the oral promise doesn’t contravene the statute of frauds
What Must always exist before statute of frauds applies?
Mutual assent
What is an obligation!
All duties recognized by law, whether contractual or not
In order to answer for the debt of another there must be what?
1) at least avoidable obligation to the person
2) a known principal surety relationship
What is the main purpose rule?
If the party promising has for his object of benefit which he didn’t enjoy before his promise, which occurs immediately to himself, his promises original, whether made before, after, or at the time of the premises third-party, notwithstanding the effect is to promise to pay or discharge the debt of another
What are The two elements of the main purpose rule?
A) must be consideration for defendant’s promise
B) consideration must be beneficial to the defendant
If you owe money to someone, and that person has a lean on your property and your mom promises to pay the debt to discharge the lien, does the main purpose rule apply?
Depends on whether your mom has some interest to protect, if so then yes the rule applies, if not then it doesn’t
Are promises of indemnity with in the SOF?
No
What is suretyship?
A promise to answer for the debt, default or miscarriage of another
What is a promise of indemnity?
When the contract is made solely for the benefit of the promisee, and not for the accommodation or benefit of some third person
What is a promise of the del Credere agent?
One who receives possession of the goods for sale on commission and who guarantees to the principal the buyers on credit will pay. The oral promise is not within the SOF
How does that SOF apply to consideration of marriage contracts?
Covers any agreements made on consideration of marriage, but doesn’t apply to mutual promises to marry, but does apply to promises to give money, property, or anything else in exchange for marriage. Doesn’t apply if the promise is made just in contemplation of marriage
What does statute of frauds require for contracts for the sale of land?
They aren’t enforceable unless there’s a sufficient record signed by the party to be charged
Do UCC says that no contract is enforceable beyond the quantity stated in a writing or other record. T or F?
True
If the party has received an excepted goods, what is the assumption?
unambiguous overt admission of a contract actually exists
If there’s only been part payment on ucc contract, what is the person responsible for?
The contract is enforceable only for goods that payment has been made and accepted
Part payment only gives rise to what?
Partial enforcement. If I just apportionment can be made, it should be, and if it can’t, part payment should make the entire contract enforceable. Can be made by money, check, goods, or services so long as they are excepted
What is the one-year provision work in the statute of frauds?
The contract must be completed within one year of its commission in order for there not to be a writing.
How are contract of indefinite duration treated under the statute of fraud?
Usually they are not within the statute of thoughts
Is the question to ask when you’re wondering if the contract is within the one-year section of statute of fraud?
Ask would it be a breach to perform in less than a year?
Does a performance conditioned on an uncertain event fall within the statute of frauds?
No because it can be performed within a year
And promises that are terminable on and uncertain event within the statute of fraud?
No because the event might terminate within a year
Promises of permanent employment within the statute of frauds?
No
What is a defeasance?
When a contract is phrased in terms of number of years rather than lifetime, death is a defeasance that renders it Nolan void rather than a fulfillment
If the contracting party promises one of two or more promises in the alternative is that with in the statute of frauds one year section if any of the alternatives can be performed within one year from the time of the making of the contract?
No
If there are multiple promises made in a contract, one of which can’t be performed within one year from formation, how does that affect the one-year section of statute of frauds?
It is within the one-year section, meaning it is unenforceable in the absence of sufficient record
What is the majority view for full performance on one side of a contract - is that within the one-year section of the statute of frauds?
Yes
What is the minority view about full performance being rendered on a contract, relating to the one year section of statute of frauds?
Performance is ineffective to render the contract enforceable, so the performing party can only have a clause I contractual remedy
Unilateral contracts fall under the one-year section of the statute of frauds?
No, they are enforceable without statute of frauds because if the plaintiff is fully performed, the one your provision is not a defense
If the contract falls under more than one section of the statute of frauds, what should be done ?
Most restrictive section is usually applied. The one near section applies to all contracts matter what their subject matter
What does the parole evidence rule say about consistent additional nonessential oral terms being shown when there isn’t a total integration?
That is acceptable
If reformation is being sought does the statute of frauds exclude parole evidence that proves the agreement on record isn’t in accord with the parties previous oral agreement?
No, majority opinion says that by enforcing an oral agreement, it is rectifying the records that can conform to what the parties thought they were recording
- minority refuses to admit this evidence
The term is intentionally omitted can it be added to reformation?
No
What must a record state with reasonable certainty?
- The identity of both parties
- Subject matter of the contract
- Essential terms and conditions of all promises
What is a writing?
And be receipt, telegram, exchange of correspondence, business record book, corporate minutes, check, letter, a written offer that was orderly excepted, even a suicide note, electronic messages
The statute of frauds says a memo is sufficient if signed by who?
Party to be charged
If Goods are priced at $500 or more, or real property, what must be satisfied?
Statute of frauds
If there is more than one record, and they are all signed by the party to be charged, and their contents clearly relate to the same transaction, is there a problem?
No
If the party to be charged has signed only one of numerous documents in a record, what result?
- if the unsigned document is physically attached the signed document, such if I just satisfied
- The same is true if the signed document expressly refers to the unsigned one or the same subject matter/transaction (extrinsic evidence is allowed to show the connection between the two)
Which is the UCC say are the two definite and invariable requirements of a record?
A) must evidence a contract for the sale of goods
B) must be signed
- some say it must also include a quantity term, which is unenforceable beyond the quantity stated
Just UCC say to do if a record is in error about any term other than quantity?
Extrinsic evidence is allowed to correct error
Because that UCC says that a contract isn’t enforceable be on the quantity of goods shown in the writing, if the quantity isn’t accurately stated, what result?
Recovery is limited to the amount stated, unless the court reforms the record
And UCC when merchants send a letter of confirmation who needs to sign it?
Only the party that sent it
Under the UCC if the merchant receiving party gets the confirmation and doesn’t send a written notice of objection to its contents, what result?
If there’s no objection within 10 days, the confirmation is sufficient
If one or more of the promises in a contract are within the statute of frauds and others aren’t, what result?
No part of the contract is enforceable
If There has been substantial performance on one side of the contract, does the statute of frauds still apply?
Prevailing view is that substantial performance on one side takes a contract outside of the statute of frauds
Is the majority view about rescission or modification?
A contract that satisfies the statute of frauds can be rescinded Orally
What is the minority view about oral rescission or modification?
When a contract is within the statute of frauds and is in the record, it may not be modified by an oral agreement
What is equitable remedy?
Specific restitution is soft, like cancellation of a conveyance or imposition of a constructive trust, equitable lien, replevin, etc.
What is the measure of recovery in quasi-contract?
The value of benefits conferred on the defendant, or the injury incurred by the plaintiff in reliance on the contract
If the elements of promissory estoppel are present, can the party raise the defense of statute of frauds?
No, many quarts use estoppel to overcome the requirements of statute of frauds
What do courts look for in finding promissory estoppel?
Unconscionable injury, I’m just impoverishment not fully repressible by a restitution, extent to which conduct in reliance on the contract corroborates the making of the agreement
Is promissory estoppel found in goods cases?
Generally no because the UCC has many ways to deal with SOF
What are The three types of unenforceability?
- Void
- voidable
- unenforceable
Does it mean if the contract is void?
There are no obligations at all as a result
Does that mean the contract is voidable?
A party who is suffering from the defect can choose whether to enforce the contract or not
What does it mean if the contract is unenforceable?
There’s a valid contract, but there is a legal rule that prevents the enforcement of the contract until certain conditions are met. Once they have been met, the contract is fully enforceable
What are the eight separate defenses in contacts?
- formation defense
- lack of capacity
- fraud/misrepresentation
- duress/undue influence
- illegality
- mistake
- Unconscionability
- statute of frauds
What are formation defenses?
Any problem with any element of the formation of the contract can make the contract unenforceable (offer, acceptance, etc)
What is involved in lack of capacity defense?
People need to be sane, sober, of age, incapable of understanding what is going on. If any of those are not true the contract is voidable
Incapacitated parties are obligated for what?
Necessities, if they buy them they must pay for them
If a party doesn’t know that someone there contracting with is an infant, what result?
Doesn’t matter if they knew, the contract is voidable
The fact that someone has a mental infirmity can only be a valid defense if what?
The other party new or should have known of the infirmity
What are the two types of fraud?
- fraud in the execution/factum
- fraud in the inducement
What is fraud in the execution?
When a party has been defrauded into entering a contract, they didn’t realize it was happening when they did it… Contract is void. Ie) you sign what you think is a birthday card, but it was actually a contract
What is fraud in the inducement?
When you’re defrauded about the subject matter of the contract. It is voidable by the party that has been subjected to the fraud. Ie) find properties think is on the lake, but it’s actually on the swamp
What is duress?
Force, undue influence, putting someone in a position where they are doing something they don’t want to do
What are the two kinds of duress?
1) personal duress
2) economic duress
What is personal duress?
Physical, psychological, threats to your family, superior position relationship. All create avoidable obligation by the party subjected to the duress
What is economic duress?
The party that caused the duress must also have caused the bad economic problem ie) if the repairman purposely breaks your AC to make you pay a huge amounts of fix-it that is economic duress
What is illegality?
You agree to do something that is illegal
What are the two types of illegality?
A. Illegal contract
B. Illegal purpose
What is an illegal contract?
Subject matter of the contract is prohibited by law, which makes avoid
What Is illegal purpose?
The reason the parties are entering into the contract is prohibited by law, which makes the contact voidable by the innocent party
What is the defense of mistake?
If a mistake is big enough to avoid the obligations from being performed, it can be a defense
What are the three different kinds of mistake?
- unilateral mistake
- mutual mistake
- ambiguity
What is a unilateral mistake?
When one party is mistaken about a material issue in the contract, and the other party may or may not know about the mistake. There is no defense in this case unless the other party new or should have known the mistake was being made
What is mutual mistake?
The parties are mistaken about a common matter or assumption of the material issues of the contract, which makes the contract voidable by either party
What is ambiguity?
There is an ambiguous material term of the contract, making it no contract unless both parties intend the same meaning, or less one-party knows there is an ambiguity and the other does not, in that case the contract is enforced the way the non-knowing party
What is unconscionability?
When an unfair advantage is being taken by one party over another, and the court can do anything necessary to make the contract fair
What are The two types of unconscionability?
- procedural unconscionability
- substantive unconscionability
What is procedural unconscionability?
A party has substantially superior bargaining power over another
what is substantive unconscionability?
The terms of the contract or oppressive and unfair
What is the blue pencil power of the court as a remedy for unconscionability?
The court finds either types of unconscionability, they can do anything necessary to make the contract fair. Can we write the offensive clause, strike it from the contract, avoid the entire agreement
How is statute of frauds a defense to contract?
This is a statute that holds at the performance of certain contracts until tangible evidence of the existence of that contract can be offered to satisfy the statute of frauds
What are the three types of tangible evidence that will satisfy the statute of frauds?
- Writing
- performance
- promissory estoppel
How can a writing satisfy the statute of frauds?
Anaphase the parties to the contract, states the subject matter, just all material terms, signed by the party to be charged. avoids oral agreements
How Can performance satisfy the statute of frauds?
Full or part performance of either or both parties satisfies to the extent of the performance has the performance is tangible evidence of the existence of the contract
How does promissory estoppel make a contract enforceable under the statute of frauds ?
If one of the parties has detrimentally, reasonably, and for see if we relied on the agreement, the reliance is evidence that a contract must of been made, so through this the contract can be satisfied
What types of contacts are covered by the statute of frauds?
- real estate contracts
- UCC sale of goods for $500 or more
- contracts that cannot be completely performed within one year from formation
- contracts that answer for another’s debt
- marriage as consideration for a contract
What is the goods over $500 rule of the SOF?
If the sale of goods is for $500 or more, there must be a writing or part or full performance, and also includes:
- if the goods are specially manufactured
- merchant’s confirmatory memorandum
- admission in a court that there is a contract
If there’s any possibility that a contract will be completely performed within one year, how does that affect statute of frauds?
Even if it is highly unlikely that it will happen in one year, the statute of frauds does not apply
What are the two rules under statute of frauds for contract the answers for another’s debt?
1- Must be a collateral promise (first party says he will take the primary debt, and the other party will pay if he doesn’t)
2- must not be for the benefit of the promisor (must be a gratuitous collateral promise for statute of frauds to apply… If the person is doing it for his own benefit in the rule is but it isn’t covered by the SOF because the main purpose of agreeing to satisfy the debt is for your own personal benefit
What are the three big picture areas of contacts?
- formation
- performance
- remedies
What is the one-year provision of the statute of frauds?
Contracts which cannot buy their own terms before the completed within a year
Do you measure the duration of the one-year provision of SOF?
Starts when the contract is formed, and ends on the date of completion. It doesn’t matter how long it will actually take to complete, it just matters if by its own terms It cannot be fully completed within a year
How do you prove the existence of a contract under the statute of frauds?
1) must be a writing
2) signed by the party to be charged
3) contains all essential terms (unless it is UCC then it just has to state the quantity)
How formal does a UCC contract have to be?
Not formal, a simple memo, napkin, or any form of writing will do. It doesn’t even have to be on a piece of paper
What is the major exception to merchants confirming memorandum?
Only in transactions between merchants, only the sending merchant must sign, if the document is sent within a reasonable time after the oral agreement was made and if the party to be charged does not object within 10 days, the party will be held to the terms of the memo
You have a writing is an integrated, doesn’t contain the full set of agreements of the parties, those things can be explained and supplemented by what?
Parol evidence
How does the UCC differ in its treatment of the parole evidence rule?
It allows evidence to help clarify the meaning of terms even if there’s a total integration
