Transcript Document

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CHAPTER
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What You Will Learn:
 How to explain the purpose of the Statute of Frauds
 How to explain the legal status of a contract that is not in
writing
 How to identify the elements that must be included in a
written contract
 How to deal with contradictory and ambiguous terms in a
written agreement
 How to identify which contracts must be writing
Why It Is Important:
Understanding which contract must be in writing, as well as
the elements of writing, will help you avoid pitfalls associated
with the Statute of Frauds
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CHAPTER
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• Purpose of Writing
– Breach of Contract
• Is a wrongful failure to perform one of more promises of
a contract
– Perjury
• Is making false statements while under oath of the court
– Statute of Frauds
• Are state laws requiring that certain contracts be in
writing
• A written contract helps the clarify the agreement
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• Elements of a Writing
– Memorandum
• Does not need to be formal
– Sales slip, invoice, check
– Place, date, parties involved, price and terms, and signatures
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– Evaluating Contradictory Terms
• Hand written term contradict typed contracts
• Written words prevail over numbers
– Evaluating Ambiguous Clauses
• Written contracts can be understood in different ways
• Courts will typically rule in favor of the party who did not
write the contract
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CHAPTER
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• Contracts Must Be in Writing
– Some states require that certain types of contracts
be in writing to be enforceable
– It does not eliminate the essential elements, but
requires the contract to be in writing
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Debts of others
Debts of dead
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Marriage
Sales in the amount over $500
Real property
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CHAPTER
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– Contracts to Pay Debts of Others
• Agreements for one person to pay the debts of an other
must be in writing.
• Co-signer
– Contracts to Pay Debts of Deceased Persons
• Agreeing to pay a dead persons debt needs to be in
writing
– Contracts Requiring More Than a Year to Perform
• Must be in writing if they cannot be performed within
one year of the date they are made
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– Contracts in Consideration of Marriage
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Marriage is a valid and binding contract
Promises made to one another are the consideration
Oral in nature
Generally not enforceable
– Either party can back out without being liable
• If a third person agrees to pay two other for marrying,
that needs to be in writing
• Adopting a child from a previous marriage must be in
writing as well
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– Contracts of Sale of Goods of $500 or More
• Must be in writing if price is over $500 to be enforceable
• Goods are movable items
– Contracts to Sell Real Property
• Must be in writing to be enforceable
The exception is called Equitable Estoppel
Also called Part performance
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CHAPTER
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• Reviewing What You Learned
– What is the purpose of the Statute of Frauds?
– What is the legal status of a contract that is not in
writing?
– What are the elements that must be included in a
written contract?
– How are contradictory and ambiguous terms in a
written agreement interpreted by a court?
– What contract must be in writing?
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CHAPTER
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What You Will Learn:
 How to explain the parol evidence rule
 How to identify the exception to the parol evidence rule
 How to explain the lest evidence rule
 How to change a contractual writing
Why It Is Important:
By understanding the parol evidence and best evidence rules,
you will know what business records to keep when you enter
a contractual relationship that requires a writing
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• Special Rules for Written Contracts
– Special rules apply to written contracts
– Parol Evidence Rule
• Oral agreements prior to written contract are not
enforceable
– Parol – from the mouth
– Evidence – anything presented as proof
– The Best Evidence Rule
• Original is usually required
– Copies are looked at with disfavor by the court
– Duplicate originals are your copy of the original contract
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• Changing the Writing
– Beware of the small print
• Read the ENTIRE contract BEFORE you sign it.
• If you don’t understand or agree to it, cross it out before
you sign. Have the other party initial where you crossed
out
• Don’t be afraid to make changes to a printed form. If
promises were made to you, write them in.
• Refuse to sign if you do not agree with everything in
writing. Sometimes an oral agreement is a better
position.
• If the contract is too complicated and unclear, consider
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have a lawyer look at it – it may be worth the price.
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• Reviewing What You Learned
– What is the parol evidence rule?
– What are the expectation to the parol evidence
rule?
– What is the best evidence rule?
– What rules govern the changes in a written
contract?
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