Statute of Frauds Flashcards

1
Q

What is statute of frauds?

A

Most times, oral K is valid.

However, certain K’s by statute must be EVIDENCED by a WRITING SIGNED BY THE PARTY TO BE BOUND

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2
Q

In general, when does statute of frauds apply?

A

MY LEGS

M - promises in consideration of marriage
Y - promises that by its terms CANNOT be performed within one year (running from date of agreement)
L - promises creating an interest in land
E - promise by executor (or admin) to pay estate’s debts out of his own funds
G - goods priced at $500 or more
S - surety promises (unless it serves one’s own pecuniary interest)

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3
Q

What are examples of promises creating an interest in land?

A
  1. purchase of real property
  2. leases for more than 1 year
  3. mortgages and other security liens
  4. fixtures
  5. minerals/structures

NOT:

  • contract to build building
  • contract to find buyer/seller (broker contract)
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4
Q

with regards to land K, what will remove it from statute of frauds?

A
  • full performance by seller

- part performance by buyer

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5
Q

With regards to K that cannot be performed within 1 year , what are the rules that apply?

A
  • date runs from date of agreement (not performance)
  • part performance does not satisfy SOF
  • full performance by one party WILL remove it from statute of frauds
  • WATCH for contract measured by lifetime (bc it’s capable of performance within 1 year)
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6
Q

What are the special rules to know re: goods priced at $500 or more?

A
  • writing is sufficient even if it omits or incorrectly states a term, but K is NOT enforceable beyond QUANTITY of goods stated in writing
SPECIAL EXCEPTIONS (SWAP) - 
1. "specially manufactured goods" -  if seller has made substantial beginning in manufacture or commitments before notice of repudiation is given
  1. “written confirmation btwn merchants” - only if btwn merchants and if recipient has:
    (i) reason to know of contents; AND
    (ii) does NOT object within 10 days
  2. “admissions in pleading or court” - if party admits in pleadings testimony or otherwise in court that contract was made, will be enforceable (but only to extent of quantity admitted)
  3. “payments or delivery of goods” - if goods are either received and accepted or paid for, the contract is enforceable. However, not above the quantity of goods accepted or paid for. (if indivisible item is partially paid for, most courts hold that SOF is satisfied for whole item.

(See also confirmatory memo rule)

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7
Q

What is the special rule re: confirmatory memo and SOG?

A

In contracts btwn merchants, if one party, within a reasonable time after an oral agreement has been made, sends a WRITTEN confirmation of the understanding that is sufficient to bind sender, it will also bind recipient if:

  1. he has reason to know of confirmation’s contents; AND
  2. does not object within 10 days of receipt
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8
Q

What is the effect of non-compliance with statute of frauds?

A

non-compliance with SOF renders K unenforceable at option of party to be charged

(ie… party being charged may raise lack of a sufficient writing as an AFFIRMATIVE DEFENSE)

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9
Q

What is the rule re: SOF and waiver?

A

If SOF is not raised as an affirmative defense, it is waived

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10
Q

What is the rule re: part performance and land sale contracts?

A

If seller FULLY PERFORMS (conveys title) –> he can enforce buyer’s oral promise to pay

Buyer –> may seek to enforce oral contract based on PART PERFORMANCE that unequivocally indicates that parties have contracted for sale of land. Most jdxns require AT LEAST two of the following:

  1. payment (in whole/part)
  2. possession
  3. valuable improvements

NOTE: Buyer may enforce the above ONLY in equity (ie SPECIFIC PERFORMANCE). He CANNOT get money damages.

MBE TRICK –> watch for fact pattern where parties orally agree to installment land contract. This may not UNEQUIVOCALLY indicate a sale of land, as it may also be consistent with a short term lease.

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11
Q

What is the rule re: PART PERFORMANCE and sale of goods?

A

Part performance takes SOG out of SOF IF:

  1. goods have been specially manufactured; OR
  2. goods have been either paid for or accepted

NOTE: if goods have been paid for/accepted, it’s only enforceable to the extent paid for/accepted

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12
Q

What is the rule re: FULL performance of contract that cannot be performed within 1 year?

A

Contract that cannot be performed within 1 year but that has been FULLY PERFORMED by one party is enforceable

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13
Q

What is the rule re: equitable and promissory estoppel?

A

Estoppel may be applied if it would be inequitable to allow SOF to defeat a meritorious claim

Examples:

  1. Def falsely and intentionally tells plaintiff that contract is not within SOF;
  2. Def induces P to change position in reliance on oral agreement
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14
Q

What is the rule re: judicial admission?

A

If party admits in pleadings/testimony that there is an agreement, it is treated as a signed writing

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15
Q

What is the effect if contract is within the SOF?

A

If K violates SOF, in almost all cases a party can sue for the reasonable value of the services or part performance rendered, or the restitution of any other benefit conferred

EXAM TIP –> if part performance takes K out of SOF, then plaintiff will have option of suing on the contract and seeking expectation damages rather than merely in restitution for the value conferred.

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16
Q

What is the rule with regards to the “writing” requirement ?

A
  • SOF does NOT require a formal written K. Writing can be a receipt, letter, check w/ details in memo line, written offer that was accepted orally.
  • SOF requires only ONE or MORE writings that:
    1. reasonably identify the subject matter of the K;
    2. indicate that a K was made; AND
    3. state with reasonable certainty the essential terms
17
Q

With regards to the writing requirement, does electronic record satisfy?

A

Yes

Example –> email

18
Q

With regards to the signature requirement, how is this construed?

A
  • liberally construed by most courts
  • Signature = any mark or symbol made with the intention to authenticate the writing as that of signer
  • need not be handwritten, can be typed/printed.
19
Q

With regards to the signature requirement, what is the rule under UCC?

A
  • party’s initials or letterhead is sufficient.

- electronic signature is sufficient.

20
Q

What is an essential term?

A
  • depends on context of contract
  • there must be enough in the writing to enable court to enforce
  • EXAMPLES of ESSENTIAL TERMS –> identity of parties, description of subject matter, terms necessary to make K definite
  • IF LAND SALE –> description of land + price
  • IF EMPLOYMENT –> length of employment
  • IF SOG –>
    1. some signed writing indicating K was made; AND
    2. quantity
21
Q

What is the rule re: admissibility of evidence and terms?

A

If essential term IS contained in K –> evidence is admissible to explain the particulars

HOWEVER –> evidence is NOT admissible to supply a missing term