Statute of Frauds

Question 1

When is a writing required? (7)

Answer 1

1- Transfer of any interest (including a lease) in real property
2- Performance cannot possibly be completed w/in a year
3- sale of goods for $500 or more (art 2)
4- Lease of goods for $1,000 or more (art 2A, NY only)
5- Surety
6- Contract modification w/in SOF category
7- Miscellaneous NY provisions

Question 2

HYPO- W authorizes an agent to sell Ws ranch. Must the agent’s authorization be in writing?

Answer 2

MBE- an agent’s authority concerning real property must be in writing under the EQUAL DIGNITIES RULE, which says that if the underlying transaction falls w/in the SoF than the agent’s authority does so as well

NY- The agent must be authorized in writing OR the principal must ratify

Question 3

Lifetime Contracts– writing required?

ex- S orally agreed to employ B for the rest of his life

Answer 3

MBE– no; lifetime Ks don’t fall w/in SoF

NY- yeas; lifetime Ks fall w/in the SoF in NY

Question 4

Oral Modifications of Contracts

Answer 4

• must be in writing only if the K as modified is w/in the SoF
• Article 2 will allow the parties to create their own SoF and prohibit oral modifications in all instances
• Under Common Law, clauses that prohibit oral modification are not enforceable

Question 5

Miscellaneous NY SoF Writing Requirements

Answer 5

• assignment of an insurance policy
• promise to pay a discharged debt
• agreement to pay a finder’s fee or broker’s commission UNLESS to an attorney, auctioneer, or licensed real estate agent is involved

Question 6

What qualifies as a satisfactory writing for an Article 2 Sale of Goods contract?

Answer 6

Must:

• contain a quantity term (requirements allowed)
• be signed BY THE PARTY TO BE CHARGED W/ BREACH [aka THE DEFENDANT] (remember, signed is broadly defined by UCC)

Question 7

What qualifies as a satisfactory writing for an Article 2A Lease of Goods (NY only)?

Answer 7

• must state it is a lease
• quantity
• duration
• rental payments
• be signed by the defendant

Question 8

What qualifies as a satisfactory writing for a K not under the UCC?

Answer 8

• must contain all material terms (who/what)

- must be signed by the party to be charged w/ the breach (THE D)

Question 9

Exceptions to SoF re: Real Property

Answer 9

• leases of one year or less (short term leases)
• part performance exception: requires two of three (1) buyer is in possession of the property; (2) buyer made some payment; or (3) buyer made improvements to the property

Question 10

Exception to SoF re: “One-Year” prong

Answer 10

Full Performance Exception

Question 11

Exceptions to SoF re: Goods $500+ (4)

Answer 11

(1) Goods accepted OR paid for by buyer– ONLY applies to goods accepted or paid for, NOT the whole contract
(2) custom made goods that have substantially started being made and are not suitable for sale to others in the seller’s ordinary course of business
(3) Judicial Admission of obligation
(4) Merchants’ Confirmatory memo- one party can use its OWN signed writing to satisfy the SoF against the OTHER party if: (i) both merchants; (ii) writing claims agreement/has quantity; and (iii) there is no written objection w/in 10 days

Question 12

Exception to SoF re: Suretyship Contract

Answer 12

MBE– “Main Purpose” Exception: if the surety’s main purpose in making the promise was to benefit himself (rather than the debtor) than no writing is required for enforcement.

NYBE– NY DOES NOT RECOGNIZE ANY EXCEPTIONS TO THE SOF REQUIREMENT THAT SURETY AGREEMENTS BE IN WRITING