Transcript No Slide Title

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.
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.
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.
 If the promisor makes the guarantee out
of self-interest, the statute of frauds
does not apply.
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.
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.
Sale of Goods -UCC §2-201(1) - The Basic Rule
• A contract for sale of goods worth $500 or
more is not enforceable unless there is some
writing, signed by the defendant, indicating
that the parties reached an agreement.
• A change has been proposed to raise the
minimum from $500 to $5,000 and to
eliminate the one-year rule in sales of goods
contracts.
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.
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.
Electronic Contracts
• In this age of Internet commerce, the rules
of contracting have to be interpreted in light
of the technology.
– Is an e-mail sufficient to be a writing?
– Is an electronic signature sufficient?
• However, the essential questions are still the
same:
– Did the parties intend to make a deal?
– What were the terms?
– Is there evidence that they both agreed?
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.
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.