Statute of Frauds

Question 1

Writing Req.

Answer 1

A K need not be in writing unless it is required by the SOF. Therefore, a K within the SOF is not enforceable absent a writing signed by the party against whom the enforcement is sought.

Question 2

How to Analyze a SOF Q?

Answer 2

1) Does the agreement fall within the SOF?
2) Is the SOF satisfied?
3) Is alt. enforcement available?

Question 3

Ks that Fall Under the SOF (MYLEGS)

Answer 3

• Marriage Ks
• Year- Ks that will not be completed within one year of the formation of the K
• Land- Ks that involve the sale of an interest in land
• Executor- a K of an executor or administrator to answer for a duty of the decedent
• Guarantee- A K of guarantee or suretyship (promise to take on another’s debt)
• Sale- A contract for the sale of goods at a price of $500 or more (UCC SOF)

Question 4

Performance Within One Year Ks

Answer 4

If there is any possibility that performance can be completed within one year, then the K will not violate the SOF.

Question 5

Performance Within One Year: Measuring Date

Answer 5

The year at issue under the one-year provision is measured from the date of the Ks formation rather than the date of the beginning of performance.

Question 6

Lifetime or Permanent K of Employment

Answer 6

• Under the majority rule, these Ks are not governed by the one-year provision because the employee’s death is possible within the first year.
• The minority treats these types of Ks as falling within the one-year provision.

Question 7

Land-Sale Ks: Contract for Future Sale v. Present Conveyance

Answer 7

• A K for future sale is governed by the land provision and requires a signed writing
• A present conveyance of land promised for money is held to be outside the land provision.

Question 8

Guaranty/Suretyship Agreements

Answer 8

Has two critical exceptions:

• when the creditor discharges the original debtor from his obligation on the faith of a guarantee by a third party to pay the debt.
• (main purpose exception)- when the main purpose of the guarantor’s promise is to protect or promote his own economic interests

Question 9

When the SOF Applies

Answer 9

If a K falls within the SOF, then the general rule is that the K is unenforceable unless evidence by a writing signed by the party against whom enforcement is sought

Question 10

What Writing is Required?

Answer 10

The actual agreement does not have to be put in writing, the writing need only contain:

• the identify of the parties to the transaction
• the nature and subject matter of the K; and
• the essential terms of the unperformed promises in the agreement

Question 11

The Signature Req.

Answer 11

• The actual signature of the party against whom enforcement is sought is not necessary.
• Any symbol, including initials; typed, stamped, or preprinted signatures; or letterhead, if used with the intention to authenticate the writing, will suffice

Question 12

Uniform Electronic Transactions Act (UETA)

Answer 12

Has been adopted by most states. States that electronic signatures are considered to satisfy any legal writing requirements.

Question 13

Tacking Together Multiple Documents

Answer 13

The writing need not be a single document; a party may satisfy the SOF by tacking together several documents which once combined, satisfy all the necessary requirements for SOF.

Question 14

Performance

Answer 14

The SOF may be satisfied with respect to some of the categories of governed Ks via part performance (including land Ks and one-year Ks).

Question 15

Part Performance of Land Ks

Answer 15

Makes sale of land Ks enforceable in two situations:

• in an action by the buyer against the seller, but not in an action by the seller against the buyer; and
• in an action for specific performance, but not in an action for money damages

Question 16

Part Performance of Land Ks Req.

Answer 16

P must show two of the following:

• payment of all or part of the purchase price
• taking of possession; and
• making substantial improvements to the property

Question 17

Part Performance of Oral Ks

Answer 17

• Full performance of an oral K for services by the party performing the services will make the K enforceable against the paying party. Part performance is not compensable on the K.
• The performing party may be able to recover for the reasonable value of the services actually rendered via quantum meruit.

Question 18

Enforcement Where CL SOF is not Satisfied

Answer 18

Include:

• recovery for benefits
• promissory estoppel

Question 19

Recovery for Benefits Conferred (Restitution and Quantum Meruit)

Answer 19

• Where one party bestows benefits upon another in connection with an oral contract, even if the K is barred by SOF, the aggrieved party can file an action for restitution seeking to recover value of benefits conferred.
• One could also sue on a theory of quantum meruit for reasonable value for the services rendered

Question 20

Promissory Estoppel: Stiff Req.

Answer 20

Some courts will impose stiffer req. on the claimant than those applicable under an ordinary PE action including:

• the definite and substantial character of reliance, and its relationship to the remedy sought
• the extent to which the reliance is corroborated by the evidence of the formation and the terms of the K
• the extent to which the formation and terms of the K are otherwise established by clear and convincing evidence

Question 21

When Goods Ks Violate the UCC SOF

Answer 21

The entirety of the K is unenforceable, not just the portion of the K which exceeds $499.99.

Question 22

What about Ks that are Subsequently Modified

Answer 22

If a K is modified so that it falls under the SOF, it must comply with the SOF.

Question 23

Satisfying the UCC Statute of Frauds (SMIPS)

Answer 23

• Signed writing; or
• Merchant’s confirmation; or
• In-court admission; or
• Part performance; or
• Substantial reliance by the seller of specially manufactured goods

Question 24

UCC SOF: Signed Writing

Answer 24

Requires a writing + signed by the party against whom enforcement is sought + which is sufficient to indicate that a K for sale has been made between the parties.

Question 25

UCC SOF: What is a Signed Writing?

Answer 25

The UCC broadly defines “signed” as “any symbol executed or adopted by a party with present intention to authenticate a writing,” which covers the same variety of “signings” effective under the CL SOF.

Question 26

UCC SOF: Quantity Term Req.

Answer 26

The UCC SOF requires the term indicating the quantity of goods sold in the transaction. The K is unenforceable beyond the quantity of goods shown in the writing, irrespective of the parties’ actual agreement.

Question 27

Exceptions to the Quantity Term Req.

Answer 27

• Where other language in the writing provides an unambiguous basis for measuring quantity; and
• In the case of output and req. Ks, the expression “output,” “requirements,” or their equivalent satisfies the quantity req. under the UCC.

Question 28

UCC SOF: Merchant’s Confirmation

Answer 28

When one merchant sends the other a written confirmation of the agreement. Requires that a writing:

• is sufficient against the sender
• is in confirmation of the K
• is sent within a reasonable time of the making of the oral agreement; and
• the contents of which the receiving merchant has “reason to know”

Question 29

UCC SOF: After Receiving the Merchant’s Confirmation

Answer 29

The recipient must provide written notice of objection to the confirmation’s contents within 10 days of receipt.

Question 30

UCC SOF; In-Court Admission

Answer 30

• When a party against whom enforcement is sought “admits in his pleading, testimony, or otherwise in court that a K for sale was made”
• Applies whether admission is voluntary (as in pleadings) or involuntary (as on cross-examination)

Question 31

UCC SOF: Part Performance

Answer 31

• Divisible goods (e.g. widgets)- part performance secures enforcement for any quantity that has already been paid for by the buyer or delivered by the seller (K is not enforceable beyond that quantity)
• Indivisible goods (e.g. speedboat)- partial payment secures enforcement of the entire K, though a minority of courts refuse enforcement unless full payment has been made

Question 32

UCC SOF: Substantial Reliance by Seller (5 Elements)

Answer 32

Requires 5 elements:

• the goods are to be specially manufactured for the buyer
• the goods are not suitable for sale to others in the ordinary course of the seller’ business
• the seller has substantially begun to manufacture, or made commitments to procure, the goods
• the actions undertaken to begin to manufacture or procure occurred under circumstances that reasonably indicate that the goods are for the buyer
• the actions undertaken to begin to manufacture or procure occurred before the seller received notice of the buyer’s revocation.

Question 33

Enforcement When the UCC SOF Is Not Satisfied

Answer 33

• If a party has relied to his detriment on an oral K whose enforcement is barred by the UCC SOF, the aggrieved party may be able to secure a remedy via promissory estoppel
• Although some courts impose enhanced proof requirements on the claimant such as proving unconscionable injury or that the other party would be unjustly enriched without enforcement of K.
• Courts are particularly protective of general contractors because of their vulnerability

Question 34

No Mutuality of Obligation Under the Statute of Frauds

Answer 34

• The SOF does not require that both parties have signed a writing, only that the party against whom enforcement of the K is sought has signed except:
• when the merchant’s confirmation req. applies.