Statute of Frauds

Question 1

Define

Statute of Frauds

Answer 1

Holds some K’s as unenforceable unless in writing

Question 2

To satisfy the Statute of Frauds, a writing needs to contain:

Answer 2

1. Reasonably identify the subject matter of the K
2. Essential elements of the deal; and
3. Be signed by the party asserting the SOF defense

⚠️Note: Writing does not need to be formal (e.g. correspondence will suffice) and can be done during or after K formation

Question 3

When does performance satisfy the SOF?

Answer 3

For:

1. Service K’s (full performance satisfies SOF)
2. Unique or custom made goods (substantial beginning towards performance)
3. Real estate K’s if buyer does 2 of the 3 following acts:
   
   • Full or part payment of the purchase price
   • Possesses the property; or
   • Improves the property

Question 4

What 6 types of K’s are subject to the Statute of Frauds?

Answer 4

1. Marriage;
2. Contracts that cannot be performed within a year;
3. Land interests (real estate sales and leases > 1 year);
4. Executor (contracts for an executor or administrator to answer for the duty of a decedent);
5. Suretyship for another’s debts; and
6. Contracts for the sale of goods for a price of $500 or greater

Question 5

Does mutual promise to marry, without consideration, fall within the SOF?

Answer 5

No, only marriage promises made in consideration of marriage (e.g. prenups)

Question 6

For K’s incapable of being performed within a year, when does the one-year period start?

Answer 6

From the date of K execution, not the date performance started

Question 7

What is a key question to ask when determining whether K falls within the one-year rule?

Answer 7

Do the express terms of K make it impossible to be completed in one year?

If yes → SOF applies.

Question 8

What happens if K is fully or partially performed before one-year is up?

Answer 8

Full performance: SOF no longer applies

Part performance: SOF still applies, but restitution available

Question 9

Is a lifetime employment K subject to the SOF?

Answer 9

No, because the employee could die before the end of the year

Question 10

What is suretyship and the main purpose rule?

Answer 10

K that promises to pay the debts of a third party

Main purpose rule: if the surety agreement is for the surety’s own economic benefit, then it does not fall within the SOF

Question 11

Do indemnity agreements fall within the surety requirement of the SOF?

Answer 11

No

Question 12

What type of land agreements are governed by the SOF?

Answer 12

Any agreement transferring or gaining an interest in real property

Question 13

When does part performance satisfy the SOF for real property contracts?

Answer 13

When the buyer completes 2 of the 3 following acts:

1. Full or part payment of the purchase price;
2. Possesses the property; or
3. Improves the property

Question 14

What type of land agreements are NOT governed by the SOF?

Answer 14

• Licenses for less than or equal to 1 year
• Mortgage assignments
• Leases for less than or equal to 1 year

Question 15

Are easements and leases subject to the SOF?

Answer 15

Yes, unless for a length of less than or equal to 1 year

Question 16

Does the SOF cover the land conveyance itself?

Answer 16

No, only the contract for the subsequent conveyance of the land

Question 17

Will K’s tangentially related to land fall within the SOF? (e.g. building a park on a piece of land)

Answer 17

No, must be K for an interest in the land itself

Question 18

When goods are worth $500 or more, what is needed to satisfy the SOF under the UCC?

Answer 18

A memorandum of the sale that includes:

1. Indication that K has been made;
2. Identity of the parties;
3. Quantity; and
4. Be signed by the party asserting the SOF defense

Question 19

Under the UCC, when does the SOF not apply to goods over $500?

Answer 19

• Specially manufactured goods;
• Part payment;
• Receipt and acceptance; or
• Failure to respond (if both merchants)
  
  • If no objection in writing within 10 days after receiving confirmation of the terms of K, K is enforceable without signature
• Judicial admission

Question 20

When are goods considered specially manufactured?

Answer 20

1. Specially made for the buyer;
2. Not for sale to others; and
3. Seller has made “either a substantial beginning of their manufacture or commitments for their procurement”

UCC § 2-201(3)(a)

Question 21

Under the UCC, is quantity an essential term to satisfy the SOF?

Answer 21

Yes, unless:

1. There is language providing a basis for measuring quantity; or
2. K is an output or requirements K

Question 22

What happens if the memorandum of sale contains a mistake as to the price or quantity? (UCC)

Answer 22

Agreement is still valid, but likely only enforceable for the quantity listed. Extrinsic evidence can be introduced to show the mistake, however.

Question 23

Under the UCC, when can partial performance satisfy the SOF if K is for divisible goods?

Answer 23

Partial performance up to the quantity actually delivered or paid for

Question 24

Under the UCC, when can partial performance satisfy the SOF if K involves indivisible goods?

Answer 24

Partial payment renders K fully enforceable