Statute of Frauds Flashcards
What are the 3 questions that must be answered in a SoF analysis
- Does the agreement fall within the SoF?
- Is the Statute of Frauds Satisfied?
- Is Alternative Enforcement available?
Statute of Frauds in Operation
SoF provides an exception to the general rule that contracts need not be in a writing.
If a contract is governed by the SoF it must be evidenced by a writing and signed by the person against whom enforcement is sought.
A party who does not sign a contract governed by the SoF has a defense against the party seeking enforcement.
6 Categories of Agreements Governed by the SoF
- Marriage - pre-nuptial agreements, etc.
- Year - Contracts not to be performed within one year of making
- Land
- Executor - Contracts for an executor or administrator to answer for a decedent.
- Guarantee or Suretyship
- Sale of Goods over $500 (UCC SoF)
Contracts Not to be Performed within One Year
If it is POSSIBLE to complete the required performance within one year of MAKING THE CONTRACT, then SoF is NOT triggered.
Whether the contact can be breached within one year is irrelevant
Lifetime or permanent contract of employment IS POSSIBLE within one year and does not trigger SoF
Land Sale Contracts
SoF Governs Future Sales and includes Leases
But present conveyance of land for money is outside the land provision of the SoF
RE Brokerage contracts are service contracts and not governed by the land provision of the SoF
Guaranty or Suretyship Agreement - General Rule and Exceptions
A promise to answer for the debt of a 3rd party is subject to the SoF and must be in writing and signed by the party against whom enforcement is sought.
Except
1. When a creditor discharges the original debtor from his obligation on the faith of a guarantee from a 3rd party to pay the debt.
- MAIN PURPOSE DOCTRINE: where the main purpose of the guarantee is to protect his own interests.
Is the SoF satisfied - Writing Requirement
Parties need not put the entire agreement in writing. Writing must be some memorandum of the agreement. Can be prepared before, during, or after formation.
Example memoranda held to satisfy the writing requirement
- Letter from one party to a 3rd Party
- Written offer, the acceptance of which would form the contract
- Letter from one of the parties repudiating, but so admitting the existence of the contract.
Content Requirement of a Memorandum
Identity of the Parties to the Transaction
Nature and subject matter of the contract
Essential terms such as price and date of performance.
Required Description under the Land Provision
Older case law required formal legal descriptions including meets and bounds.
Current law suggests that address or other description is sufficient.
What is needed for the signature requrement
Any symbol or mark used with the intention to authenticate the writing. Can include initials, stamped signature, or letterhead.
Tacking of Multiple Documents - Defined
A writing may tack together several documents that, when combined, satisfy all the requirements of the SoF. If all documents are signed, or if one document incorporates unsigned documents by reference, the SoF is satisfied. If unsigned documents are NOT incorporated by reference in a signed document they may be tacked together if 3 requirements are met.
Tacking Unsigned Documents that are NOT incorporated by reference in a signed document is permissible If these conditions are met
- There must be at least one signed document unambiguously establishing a contractual relationship between the parties.
- Signed and Unsigned documents clearly refer to the same subject matter.
- There must clear and convincing evidence of acquiescence to the unsigned documents by the party against whom enforcement is sought.
Performance Exception to the SoF Requirement
Part Performance Exception Requirements for Land Contracts
Requires a showing of any combination of the following
- Payment of all or part of the purchase price
- Taking Possession
3, Making substantial Improvements on the property
Performance Exception to SoF - One Year Contract
If a contract has been fully performed, then an oral contact not to be performed within one year becomes enforceable.
If partially performed, an oral contract not to be performed within one year is NOT enforceable.
Quantum Meruit - may provide a possible workaround for the party who would otherwise be unavailable to a remedy because of SoF
Performance Exception to SoF - Sale of Goods Contracts
UCC SoF may be satisfied by part performance of a sale of goods contracts.
Enforcement options for aggrieved party where SoF is Not Satisfied
If breaching party never signed a written document
May bring an action for restitution or,
if services are involved, quantum meruit for reasonable value of services performed,
or promissory estoppel
Promissory Estoppel and SoF
PE may be available for detrimental reliance for losses suffered on the faith of an oral contract where enforcement is barred by the SoF.
Easy Case is where a party to an oral contract w/i the SoF promises to create a signed writing and the other party relies by failing to take steps to satisfy the Statute. courts will apply PE if the party does not create a signed writing.
More difficult is where the parties rely on the underlying oral contract itself
Split on PE enforcement of contract barred by SoF
Slim majority holds that PE is available provided there is strong evidence of reliance.
Minority view is that the CL doctrine of PE is preempted by the SoF
Analysis under the UCC SoF
1, Is the contract within the UCC SoF - Sale of goods +$500
- Is the UCC SoF satisfied?
- Is there an alternative basis for enforcement?
List the 5 ways to Satisfy the UCC SoF
- A signed writing
- Merchants Confirmation
- In Court Admission
- Partial Performance
- Problem of Specially Manufactured Goods
Elements of A Signed Writing Sufficient to satisfy the UCC SoF
- A writing - any intentional reduction to tangible form
- Signed by a party against whom enforcement is sought. Signature is any symbol executed or adopted by a party with the present intent to authenticate a writing.
- Must be sufficient to indicate that contract for the sale of goods HAS BEEN MADE between the parties.
How to satisfy the UCC SoF requirement that the writing be sufficient to indicate that a contract for the sale of goods was made between the parties?
Writing must provide a basis for believing that the offered oral evidence rests on a real transaction.
Required Term to Satisfy UCC SoF Writing Requirement
and Exceptions
Quantity Term is required. The contract will be unenforceable beyond the stated term.
EXCEPT
Where there is language in the contact provides an unambiguous basis for measuring quantity. OR
Contract provides for an output or requirements contract.
