Statute of Frauds

Question 1

Two questions to ask about Statute of Frauds

Answer 1

1. Does it apply to this transaction? [is the risk of false assertion particularly high?]
2. Has the SOF been satisfied? [a higher and special form of proof]

Question 2

What types of contracts require SOF?

MSOUR

Answer 2

Marriage

Suretyship - guaranteeing the debt of another

One Year - cannot be performed within 1 year of signing

Real property - sale of an INTEREST in real property

Question 3

Main Purpose Exception (suretyship)

Answer 3

If the main purpose in agreeing to pay off the debt of another is for the surety’s own economic advantage, then SOF does not apply.

Question 4

How is the One-year Rule interpreted?

Answer 4

VERY NARROWLY - must be absolutely impossible!!!

Question 5

What are the two main ways to satisfy SOF?

Answer 5

Performance and Writing

Question 6

Can you satisfy a service contract that can’t be performed within one year by PERFORMANCE?

Answer 6

Yes - FULL performance by either side satisfies SOF (partial performance does not)

So if I fulfill my side of a bargain, but yours can’t take place within one year and then you stop performing, we still have a valid K under SOF and I can sue you

(remember this is common law universe)

Question 7

How do you satisfy SOF via writing under common law?

Answer 7

1. Writing
2. Signed by party against whom the contract is asserted (does NOT need to be signed by both people)
3. Covers the fundamentals - contract has been made, parties identified, essential elements of the deal

Question 8

SOF for real estate

Answer 8

1. Can be satisfied by writing
2. CAN also be satisfied by part performance if TWO of the following three things are met: possession, payment, or improvements to the land

Question 9

2/3 elements that can satisfy SOF via partial performance for real estate

Answer 9

Possession
Payment
Improvements to the land

Question 10

SOF writing requirements under UCC (goods!)

Answer 10

No need to mention the price

but MUST mention quantity of goods (then only enforceable for the quantity mentioned in the K)

Question 11

SOF performance requirements under UCC

Answer 11

Part performance is OK

BUT only for the quantity delivered AND accepted

Question 12

How does SOF treat custom-made goods? (UCC)

Answer 12

They are exempted from SOF!!

Maker can satisfy the SOF as soon as it makes a substantial beginning toward the manufacturing of goods

Question 13

SOF and confirming memos (UCC)

Answer 13

Failure to object to a confirming memo within 10 days will satisfy the statute of frauds IF BOTH PARTIES ARE MERCHANTS

Question 14

What BIG BUCKET does SOF apply to?

Answer 14

Whether a contract has been formed!!!

[the S in All Contracts Don’t Stink]

Question 15

Can an agent form a contract that complies with SOF?

Answer 15

Yes, if a signed writing authorizes them to do so (“equal dignity rule”

Question 16

What about modification of a SOF contract?

Answer 16

Only needs to meet the SOF if the MODIFICATION would be in SOF world. If the mod takes you out of SOF, then you don’t need to satisfy it.