THE STATUTE OF FRAUDS Flashcards
1) Contracts that fall within the statute of frauds ($500 or more) are unenforceable unless they are in writing. The writing must:
a) Be signed by the party to be charged
b) Contain the essential elements of the deal
c) The writing doesn’t need to be formal or entirely in one document (it can be incorporated from numerous documents). It does not need to be delivered. Even if lost or destroyed, proof of the writing’s earlier existence is enough (which can be proved through oral evidence).
Marriage
Contracts within the Statute of Frauds
contract made upon the consideration of marriage (not mutual promises to marry each other).
Suretyship
Contracts within the Statute of Frauds
a contract to answer for the debt or duty of another (surety agrees to a second party that they will pay any debt of a third party resulting from that 3rd party’s failure to pay as agreed) Exceptions:
i) Indemnity contracts
ii) Main purpose exception: if the main purpose of the surety is for the surety’s own economic advantage, the contract doesn’t fall within the Statute
Land Contract
Contracts within the Statute of Frauds
A contract for the sale of land (licenses, leases, and assignments of mortgages don’t apply—1-year provision still applies)
i) Part performance takes these out of the Statute: partial payment, possession by purchaser, improvement on property by purchaser
One yearrule—contracts (Contracts within the Statute of Frauds)
Contracts that cannot be performed within one year from its making must be written down. The year starts the day after the contract is made. The actual terms of the contract must make it impossible for performance to be completed within one year. Full performance will take the contract out of the statute of frauds. Part performance in this category does not.
(Contracts within the Statute of Frauds)
Under the UCC, sale of goods for $500 or more.
Writing must:
(1) Indicate a contract has been made
(2) Identify parties
(3) Contain quantity term
(4) Be signed by party to be charged.
ii) Exceptions:
(1) Specially manufactured goods
(2) Part payment takes it outside the Statute
(3) Receipt and acceptance
(4) Judicial admission—if party to be charged admits to contract in court
(5) Failure to respond to memo (between merchants)
CR Klewin
Developer, Flagship, signs CR Klewin on to be project manager for huge project at UConn (handshake deal, no writing). Press conference announces partnership. Signed a blank agreement without any specific terms (for show). After first part of the project, Flagship got a new manager.
i) The one-year provision is interpreted very strictly. Unless it is literally impossible, it’s not within the statute. Courts hate the SoF, so they interpret it this way.
(1) This contract is Indefinite in Duration–contracts that don’t have a term limitation. A contract must explicitly say the time (more than one year) to be within the Statute.
ii) Here, it is theoretically possible to be done in one year (it’s a massive project, but there’s nothing in the contract that prevents it from being done in a year).
iii) “Literally Impossible” it’s apparent on the face of the contract that the agreement cannot be performed with a year per the terms of the contract
iv) Even if there was no signed writing (the document for show in press conference) part performance would have taken this out of the statute of frauds
v) Example: “10 years, if the tenant should life that long”—this expires when the tenant dies, not within the SoF since it can happen in a year. “10 years”—this is within the statute of frauds.
Migerobe
Migerobe, Inc. v. Certina USA, Inc.
Watch manufacturer negotiated big sale to Migerobe. Parties agreed on price and quantity (recorded). Internal memo confirming the sale at discounted price. Another internal memo noting promo code. Certina backed out of sale. Judgement for Migerobe.
i) Multiple writings okay. The writing with the quantity (a necessary term for a contract) wasn’t signed. That is okay as long as the writing that is signed clearly relates to the same transaction.
ii) Writing Must:
(1) Be signed
(2) Have quantity
(3) Sufficiently show that there actually was a contract for sale
ConAgra v. Nierenberg
SoF under UCC
Wheat farmer discussed terms of wheat sales with ConAgra. ConAgra thought they had an oral agreement, Nierenberg says he was checking the price. ConAgra mailed written contract to Nierenberg. Nierenberg ignored and sold elsewhere for more. Judgement for ConAgra.
i) UCC governs. 2-201. Subsection 2 is at issue here which provides that between merchants, a written confirmation which hasn’t been objected to (within 10 days) and the receiving party has reason to know its contents, will satisfy the requirements of the SoF. (Farmers are merchants). The written confirmation must be sent within a reasonable time.
Reasonable Time =
(1) Depends on past dealings, nature of the industry, this court says 10 days because that’s what the receiving party gets to object.
Lige Dickson
(SoF and Promissory Estoppel)
General contractor that used oil as supplier of asphalt. Market price of oil increased and Lige Dickson asked for price protection for future increases. Union Oil Co. agreed. Oil Co. increased price again after oil embargo, LD sued.
i) Restatement, Section 139, allows promissory estoppel (reliance) to supersede the Statute of Frauds. This is contrary to original common law view (that reliance couldn’t supersede Statute of Frauds).
ii) UCC on the issue: 1-103 conflicts with 2-201: some courts allow estoppel to be used to combat SoF, some do not (about an even split).
iii) Broadly: UCC doesn’t allow promissory estoppel to enforce an unenforceable (according to SoF) contract. The Restatement does allow this, though this is still debated (some states apply 2-201 and reject the 1-103 argument of principles of law and equity).
iv) Court rules for Union—promissory estoppel will undermine the SoF entirely (they favor 2-201).
