Transcript No Slide Title

Click your mouse anywhere on the screen to advance the
text in each slide. After the starburst appears, click a
blue triangle to move to the next slide or previous slide.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Quote of the Day
“A verbal contract isn’t worth the
paper it’s written on.”
Samuel Goldwyn,
Hollywood producer
15
Business Law and the Legal Environment for a New Century
Alternate Edition
The Statute of Frauds
 Many agreements are unenforceable,
unless it, or some memorandum of it, is
in writing and signed. These include:
•
•
•
•
•
•
For any interest in land
That cannot be performed within one year
To pay the debt of another
Made by an executor of an estate
Made in consideration of marriage; and
For the sale of goods over $500
 Once a contract is fully executed, it
makes no difference that it was unwritten.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Agreement for Interest in Land
 A contract for interest in land must be in
writing to be enforceable.
• Exception: Full Performance by the Seller
• Exception: Part Performance by the Buyer
– the buyer of land may be able to enforce an oral
contract if she paid part of the price and either
entered the land or made improvements to it.
• Exception: Promissory Estoppel
– If a promisor makes an oral promise that should
reasonably cause the promisee to rely on it, and
the promisee does rely, the promisee may be
able to enforce the promise.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Agreements That Cannot Be
Performed Within One Year
 Unenforceable unless in writing.
Promise to Pay Debt of
Another
 When one person agrees to pay the
debt of another as a favor to that debtor,
it is called a collateral promise.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Promise Made by and
Executor of an Estate
 An executor’s promise to use her own
funds to pay a debt of the deceased
must be in writing to be enforceable.
Promise Made in
Consideration of Marriage
 Unenforceable unless in writing.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
What the Writing Must
Contain
 The contract or memorandum must be
signed by the defendant, and
 It must state with reasonable certainty:
• the name of each party
• the subject matter of the agreement, and
• all of the essential terms and promises.
Click here to go to the internet for samples of written contracts.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Sale of Goods -UCC §2-201(1) - The Basic Rule
 A contract for sale of goods worth more
than $500 is not enforceable unless
there is some writing, signed by the
defendant, indicating that the parties
reached an agreement.
Click to read the Uniform Commercial Code on the internet.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Sale of Goods -UCC §2-201(2) - Merchants’ Exception
 Within a reasonable time of making an
oral contract, if one merchant sends a
written confirmation to the other, and
the confirmation is definite enough to
bind the sender herself, then the
merchant who receives the confirmation
will also be bound by it unless he
objects in writing within 10 days.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Sale of Goods -UCC §2-201(3) - Special Circumstances
 An oral contract may be enforceable,
even without a written memorandum, if:
• The seller is specially manufacturing the
goods for the buyer, or
• The defendant admits in court proceedings
that there was a contract, or
• The goods have been delivered or they
have been paid for.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
Parol Evidence
 Parol evidence refers to anything
(apart from the written contract itself)
that was said, done, or written before
the parties signed the agreement or as
they signed it.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
The Parol Evidence Rule
 When two parties make an integrated
contract, neither one may use parol
evidence to contradict, vary, or add to
its terms.
• Exception: Incomplete or Ambiguous
– If a court determines that a written contract is
incomplete or ambiguous, it will permit parol
evidence.
• Exception: Misrepresentation or Duress
– A court will permit parol evidence of
misrepresentation or duress.
15
Business Law and the Legal Environment for a New Century
Alternate Edition
“The parties to disputes very
often could have avoided
litigation with a few carefully
crafted sentences. It is worth the
time and effort to write them.”
15
Business Law and the Legal Environment for a New Century
Alternate Edition