Statute of Frauds Flashcards
General Rule of K law (oral promises enforceable)
contract need not be in writing and oral written agreements are equally enforceable.
SOF Generally
SOF provides an exception to the general rule and makes some classes of ks unenforceable unless reflected in a signed writing
SOF as a defense
General rule is that a k within the SOF is not enforceable absent a writing signed by the party against whom the enforcement is sought. So, if SOF defense is available and you are being sued for breach and did not sign a k that is within the SOF, it is available as a defense to you.
SOF - Analyze by using these 3 questions
- Does the agreement fall within the SOF? if not, SOF DNA
- Is the SOF satisfied? If falls within SOF, check if SOF is met
- Is alternative enforcement available? Check to see if promissory estoppel or quasi-k is available to enforce
Specific Coverage under SOF - MYLEGS
- Marriage
- Ks not to be completed w/in 1 year of formation
- k for SALE of interest in land
- k of executor to answer for duty of decedent
- K of Guaranty or Suretyship
- K for sale of goods $500+ (see UCC)
performance within one year
This is measured from the date of the K FORMATION. So if completion of the k cannot possibly be completed within a year, then SOF applies (Think: I contract today to work 1.5 years from now; can’t complete k in a year, SOF applies).
Land-Sale K
This governs Ks for the sale of an interest in land. The K for future sale is governed by SOF, but present conveyance of land for money is not.
Lease of real property is governed by SOF b/c it’s a land interest
Guaranty/Suretyship Agreements
General rule is that a promise to answer for the debt of a 3rd party is subject to SOF. 2 exceptions (these need not be in writing):
- when creditor discharges original debtor from obligation on faith of a guarantee by a 3rd party to pay the debt
- Main purpose exception - if main purpose of guarantor’s promise is to protect or promote his own economic interests
Violation of SOF
if a k falls within the SOF, then the general rule is that the k is unenforceable unless evidenced by a writing signed by the party against whom enforcement is sought.
SOF - the two requirements
- a writing
2. signature
SOF - the writing requirement
All that is necessary is that the writing be a memo of the actual agreement, which can be prepared before, during or after k formation.
Examples of memos that satisfy SOF
- letter from one party to a 3rd party describing the agreement
- the written offer, acceptance of which formed the k
- a letter from one party to the other repudiating, and so admitting, the agreement
what terms are required in the memo under SOF?
- identity of the parties to the transaction
- the nature and subject matter of the k
- the essential terms of the unperformed promises in the agreement
SOF - Signature Requirement
the actual signature of the party again 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
“Tacking together” multiple documents
the writing need not be a single document; a party may satisfy SOF by tacking together several documents which, once combined, satisfy all the necessary requirements for the SOF
Land Ks and Part Performance
Part performance will make an oral k for the sale of land enforceable in two situations:
- in an action by the buyer against the seller, but not in an action by the seller against the buyer
- in an action for specific performance, but not in an action for money damages
Land Ks and Part Performance - Elements
Part performance requires a showing of any combination of:
- payment of all or part of the purchase price;
- taking of possession; and
- making substantial improvements to the property
One Year Ks and Full Performance of Oral Ks
Full performance of an oral k for services by the party performing the services will make the k enforceable against the paying party.
One Year Ks and Part Performance of Oral Ks
Part performance is not compensable on the k, but the performing party may be able to recover for the reasonable value of the services actually rendered via quantum meruit
Sale of Goods K - UCC and Part Performance
UCC SOF may be satisfied by part performance of a sale of goods k . . . this is discussed later
SOF not satisfied - Recovery of the Benefits Conferred
Where one bestows a benefit upon another in connection with an oral k, even if SOF bars enforcement, the performing party can file for restitution to seek recovery of value of the benefits conferred. In the alternative, if services are involved, the performing party can recover in quantum meruit for recovery of the reasonable value of the services he rendered
SOF not satisfied - Promissory Estoppel
Where a party suffers losses in reliance on an oral k, though SOF bars enforcement, Promissory Estoppel may be available. The courts that do allow this apply for further requirements:
- definite and substantial character of reliance, and its relationship to the remedy sought
- the extent to which the reliance is corroborated by the E of the formation and terms of the k; and
- extent to which formation and terms of k are otherwise established by C&C E
UCC SOF - what happens when SOF not satisfied?
if the agreement falls within the UCC SOF and is not satisfied, then the whole thing is unenforceable.
How to satisfy SOF UCC - 5 ways
- signed writing
- merchant’s confirmation
- in-court admission
- part performance
- Substantial reliance by the seller of specially manufactured goods
UCC SOF - Signed Writing
Signed writing requires:
- a writing - any intentional reduction to tangible form
- signed by the party against whom enforcement is sought
a. any symbol executed or adopted w/present intention to authenticate the writing - sufficient to indicate that a k for sale has been made b/w the parties
UCC SOF - Signed Writing & Qty terms
There must be a terms indicating the qty of goods sold in the transaction. The k is unenforceable beyond that amount. If no qty term, the k is unenforceable, unless:
- writing provides basis for measuring qty
- in output ks - term “output” or “requirements” (etc) satisfies the qty requirement
UCC SOF v. Firm Offer
a written offer that proposes a sale of goods at a price of $500+ that meets the firm offers rule is enforceable against the signing merchant. UCC SOF is irrelevant.
UCC SOF - Merchant’s Confirmation
A valid merchant’s confirmation requires a writing that:
- is sufficient against the sender (signed by sender w/qty term)
- is in confirmation of the k
- is sent within a reasonable time of the making of the oral agreement
- the contents of which the receiving merchant has reason to know (i.e. if sent by mail and never received, not good enough)
UCC SOF - Merchant’s Confirmation - what happens when it is satisfied?
a confirmation that meets the foregoing requirements will satisfy the UCC SOF against the recipient unless the recipient provides written notice of objection to the confirmation’s contents within 10 days of receipt, but something purporting to be an objection and nonetheless has a signed writing (and satisfied UCC SOF) will satisfy the SOF against the “objector”
EX: Objector send notice to offeree saying “i know you already agreed to pay $5k, but I can’t b/c tax implications” –> UCC SOF satisfied
UCC SOF - In court admission
UCC SOF satisfied when a party against whom enforcement is sought admits in his pleading, testimony, or otherwise in court that a k for sale was made. it is unenforceable beyond the qty established.
UCC SOF - Part performance
Despite absence of signed writing, an otherwise valid k is enforceable with respect to goods for which payment has been made and accepted or which have been received and accepted
UCC SOF - Part Performance & Divisible v. Indivisible Goods
- Divisible - part performance secures enforcement for any qty that has already been paid for by the buyer or delivered by the seller; k not enforceable beyond that amount
- Indivisible - Maj rule hold partial payment secures enforcement of the entire k (Min rule wont enforce unless there’s full pmt)
UCC SOF - Specially Manufactured Goods
Aggrieved seller can enforce oral k by establishing:
- Goods are to be specially manufactured for the buyer;
- goods are not suitable for sale to others in the ordinary court of the seller’s business
- seller has substantially begun to manufacture, or made commitments to procure, the goods . . .
- . . . which occurred under circumstances that reasonably indicate that the goods are for the buyer; and . . .
- . . . occurred before the seller received notice of the buyer’s revocation
Enforcement where UCC SOF is not satisfied
Aggrieved party may be able to secure a remedy via promissory estoppel, but courts that do allow this have enhanced requirements such as unconscionability and unjust enrichment. All courts have allowed this for general contractors against subcontractors.
Effect of satisfying SOF
If SOF is satisfied, you must still have a valid k. If you have a valid K and SOF applies, SOF must be satisfied
No Mutuality of Obligation under SOF
Only that party against whom enforcement of the k is sought must have signed in order to enforce against him. It is not enforceable against the non-signing party. Exception: merchant’s confirmation
