Statute of Frauds Flashcards
What contracts must be within the statute of frauds?
- Transfer of an Interest in Real Property
- Performance cannot be completed within 1 year.
- Sale of Goods for $500 or more
- Lease of Goods for $1,000 of more [Article 2A only]
- Suretyship
- Contract Modification if modification places contract within S/F
- Miscellaneous NY Provisions
When are real property agreements within the statute of frauds?
What exceptions exist?
1) Any transfer of an interest in real property.
* Exceptions:* A lease of property less than 1 year.
* Exception:* Part Performance exception: Requires 2 of 3 facts–
a) Buyer is in possession of the property
b) Buyer made some payment
c) Buyer made improvements to the proeprty.
What is the Equal Dignities Rule?
A property rule saying that if the underlying transaction falls within the statute of frauds, the authorization to make the agreement does too.
Ex.: Must authorize someone in writing to transfer your real property.
Does a contract employing someone for the “rest of their life” fall within the 1 year performance provision in the statute of frauds?
MBE: No. Person could die.
NEW YORK: YES. We are less morbid in NY regarding lifetime contracts.
When does the clock begin to run for the 1 year performance provision in the statute of frauds?
From the date of AGREEMENT! Not the time of performance.
[So, duration of performance is irrelevant. A one hour concert scheduled for 2016 cannot be performed within a year].
What is the statute of frauds lease provision?
Lease of goods for more than $1,000! And only in Article 2A so only in NY.
Time period doesn’t matter, just total cost of lease.
What is a suretyship?
A suretyship is a promise to “answer for” the debt of another.
Is a suretyship within the S/F?
What exceptions exist?
Yes, suretyships are within the statute of frauds.
MBE:
Exception: Main Purpose Exception: If the surety’s main purpose is to benefit the surety maker, then no writing is required.
Example: Homeowner gives paint store a surety that if the painter doesn’t pay him for the paint the homeowner will, no writing is required.
NEW YORK:
New York does NOT recognize the main purpose exception.
Are clauses that prohibit oral modification enforceable?
NO, in common law clauses that prohibit oral modification are not enforceable.
(unsure of UCC, likely stick with good faith analysis)
What falls under the statute of frauds only in NY?
- Assignment of an insurance policy
- A promise to pay a discharged debt
- An agreement to pay a finder’s fee or broker’s commission, except to an attorney, auctioneer, or licensed real estate agent.
What constitutes a satisfactory writing under the statute of frauds?
Depends on the contract.
1) Sale of Goods: Must contain a quantity term and be signed by the party to be charged with breach of contract [defendant].
2) Lease of Goods: [Article 2A only]: Must state it is a lease, and include the quantity, duration, and rental payments, and be signed by the defendant. [need 5 total things]
3) Any other contract: Must contain all material terms [the who, what], and must be signed by the defendant.
What exceptions to the 1 year performance rule of the statute of frauds exists?
General rule is that agreement must be within S/F if cannot be performed within one year.
Exception is that the defendant cannot use the S/F defense if the plaintiff FULLY PERFORMED.
Ex: Sesame Street hired Big Bird to perform for 3 years. No signed writing. Big Bird fully performed and SS didn’t pay. Big Bird can get paid the K price becuase he fully performed.
What if he hadn’t fully performed?
RESTITUTION [reasonable value].
What exceptions exist to the Sale of Goods of $500 or more prong of S/F?
(All Article 2)
1) Goods that the buyer accepted or paid for [look for apportionment]
2) Custom Made Goods [need substantial start, are goods not suitable for sale to others in S’s ordinary course of business]
3) Judicial Admission [that a contract exists - in deposition, testimony, etc]
4) Merchant’s Confirmatory Memo
How does the goods that buyer accepted or paid for exception to the S/F $500 sale prong work?
Goods that are apportionable?
Goods that are not apportionable?
(All Article 2)
1) Goods that the buyer accepted or paid for [no SF defense!]
[Goods that can be apportioned: Applies only to the goods accepted or paid for, not the whole contract!]**
[Goods that cannot be apportioned, like a downpayment on a boat - takes the whole boat OUT of the S/F! No Defense!]
Are custom made goods within the $500 S/F prong?
No, if the seller has:
1) Made a substantial start on the custom made goods
2) The goods are not suitable for sale to others in the seller’s ordinary course of business
