Generally oral contracts can be binding, but because of the potential for fraudulent claims, the law requires some of the most important contracts to be laid out in writing, transfer in real property (land, buildings,)
Under this section must think of the EXCEPTIONS, EXCEPTIONS, EXCEPTIONS! Even if the memo requirements are not met.
Statute of Frauds
Two provisions one under the Restatement and one under the U.C.C.
Restatement 2nd 110
U.C.C. 2-201
The rationale of statute of frauds, it to prevent fraudulent claims, in situations in which there may have been an oral agreement/contract. Thus, certain contracts have to be in writing to be enforceable. It also can be in enforceable if it meets one of the exceptions. A plaintiff may argue he has a contract b/c of statute of frauds there is a memo and is signed) A defendant may argue look there was no K (no memo, or it was not signed) When you are dealing w/ a case of S.O.F., important to go through a step by step analysis. Even if the requirements are not met in S.O.F., you MUST go through the analysis of the exceptions.
It involves a defense that must be affirmatively pled by the defendant.
General Restatement Common Law Statute of Frauds
Restatement 110 Second Contracts, describes the typical American Statute of Frauds Most jurisdictions have a similar rule: in order for enforcement it has to be in writing or there has to be one of the applicable exceptions.
A contract of an executor or administrator to answer for a duty of his decedent
Contract to answer for the duty of another. You are paying the debts of another party.
Contract made upon consideration of marriage (marriage provision) Contract for the sale of an interest in land (land contract provision)
The Land provision of the statute of frauds is not just limited to contracts for the sale of land, but can apply to the transfer of other interest in land, such as easements, mortgates, and leases., buildings?
contract that is not to be performed w/n one year from the making (one year provision) contract has to be beyond one year. If there is any possibility that it could be completed w/n one year, it does not meet these requirements. The statute of frauds does not apply.
Lifetime contracts are not w/n this provision, b/c person could die and therefore it would be completed w/n one year
Questions to Ask
Is the contract at issue in which the Statute of Frauds applies? Is this for a sale of land? Is it a Contract that is beyond one year? Exam remember this.
If the contract does not fit w/n the statute then the statute of frauds has no relevance to the case?
If the answer is yes the contract fits w/n one of the provisions, then need to ask
Is there some sort of memorandum, signed by the party charged? If there is than you are good to go.
If there is no memorandum, or it is not signed, seek if there are any EXCEPTIONS that will enforce contract. THIS is an IMPORTANT STEP
i. PART Performance
ii. Promissory Estoppel
1st. Memorandum Requirement
A contract within the statute of frauds will be enforceable, if there is evidence of any writing, signed by the party charged. This memo, does not have to be a formal contract. The writing must
1. Be signed by the party charged.
2. Has the essential terms of the contract
3. The writing need not be prepared w/ the INTENT of evidencing a contract.
4. Connect memos: Two different
r a specific performance of an oral agreement.
Questions arises what type of part performance will be sufficient to make an oral promise to transfer an interest in land enforceable?
Making valuable improvements on land, one example
Buzz Words:
Although the circumstances do not comply with the statute of frauds, promissory estoppels can be used as a vehicle to circumvent the rigid requirements.
Under the First Restatment (Q is this still applicable) one could use estoppel to circumvent the requirements of the statute of frauds if there was
a misrepresentation that a writing had been executed
i. Because of this misrepresentation, it induced action on behalf of the plaintiff (detrimental reliance)
promise to execute a signed writing
Both of these involve some sort of fraudulent conduct.
2nd RST 139 use of Promissory Estoppel to overcome Staute of Frauds
i.e. Plaintiff quit her job in Alaska and moved to California on the strength of the defendant’s promise to employ her as a general manger. Defendant never sent the signed memo. We use the lack of memo and failure to compl w/ S.O.f. by arguing P.E. First there was a promise, the promisor should have reasonably expected the plaintiff to take this course of action, the plaintiff thus did so, incurred great expense moved to new state. Her actions were reasonable.