Statute of Frauds

Question 1

Statute of Frauds

Answer 1

For a contract to be enforceable, SOL requires that the contract:

1. Be evidenced by a writing
2. Signed by the party against whom enforcement is sought

Question 2

Contracts governed by SOF

Answer 2

M.Y.L.E.G.S.

Marriage contract

Year = contract that will not be completed within 1 year of its formation (from date of making the K)

Land = contract for the sale of an interest in land

Executor = contract of an executor

Gaurantee = contract of guarantee or suretyship

Sale of goods $500+ (must include quantity term)

Question 3

Statute of Frauds (PA Distinctions)

Answer 3

• An oral contract not performed within 1 year is still enforceable

Question 4

Evaluation of a Statute of Frauds Problem

Answer 4

1. Does the agreement fall within the Statute of Frauds?
2. Is the Statute of Frauds satisfied?
3. Is alternative enforcement available?

Question 5

Specially Manufactured Exception

Answer 5

• Goods that are specially manufactured for the buyer
• and are not suitable for sale to others
• In the ordinary course of seller’s business
• are not subject to SoF

Question 6

Statute of Frauds Writing Requirement Satisfied

+

Statute Satisfied

Answer 6

If the signed writing requirement is met and the Statute is satisfied, then the Statute of Frauds will not render the contract unenforceable.

Question 7

SoF Subject Matter Satisfied

+

Statute NOT Satisfied

Answer 7

If the contract is within the subject matter of the Statute of Frauds but the Statute is not satisfied, then the party seeking to enforce the contract will lose.

Question 8

K within SoF

+

Statute NOT Satisfied

Answer 8

If the contract is within the Statute of Frauds, but the Statute is not satisfied, the party seeking to enforce the contract will have to use another theory of enforcement, such as promissory estoppel or quasi-contract, in order to protect his interests.

Question 9

Guaranty/Suretyship Agreements

Answer 9

General Rule:

a promise to answer for the debt of a third party—a suretyship or guaranty agreement—is subject to the Statute of Frauds has two critical exceptions.

Exceptions

1. When the creditor discharges the original debtor from his obligation on the faith of a guarantee by a third party to pay the debt, these agreements are not governed by the Statute of Frauds and do not require a signed writing by the guarantor.
2. “Main Purpose Exception” – if the main purpose of the guarantor’s promise is to protect or promote his own economic interests, rather than the interests of the debtor, then the agreement is not within SoF no signed writing is required.

Question 10

Signature Requirement

Answer 10

Actual signature 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 11

Multiple Documents

Answer 11

Multiple docs can be used to satisfy the writing requirement.

a party may satisfy the Statute by tacking together several documents which, once combined, satisfy all the necessary requirements for the Statute of Frauds.

Question 12

Effect of a successful SoF defense

Answer 12

The only effect of a successful SoF defense is to defeat enforcement of the contract against the non-signing party.