Contracts II Spring 2008 Outline
STATUTE OF FRAUDS
(i) purpose is to ensure that a person could not falsely claim, on the basis of perjured oral evidence that a contract covered by the act had been entered into.
(ii) can just as easily be used to prevent the enforcement of a genuine oral contract by a dishonest person who later wishes to renege on it. –courts are wary of this and are therefore wary of applying the statute rigidly
(iii) a defense based on the SOF is often raised at the beginning of a case by a motion to dismiss or an application for summary judgment-if the p overcomes this challenge based on the SOF, the case will go to trial on the merits.
Contracts typically subject to the SOF (contracts that must be signed in writing to be enforced) –MY LEGS
1. MARRIAGE: Promises in consideration of marriage.
2. YEAR (one): Promises that by their terms cannot be performed w/in one year.
Klewin v. Flagship
3. LAND: Promises creating an interest in land.
Roberts v. Karimi
4. EXECUTORS: Promises by executors to pay estate debt from their own fund.
5. GOODS (UCC 2-201): Agreements for the sale of goods for $500 or more, except :
a. specifically manufactured goods,
b. written confirmation of oral agreement b/t merchants,
c. admission in pleadings or court that K existed, or d) partial payment or delivery made and accepted.
6. SURETY: Promise to answer for the debt or default of another person.
***note contracts for a life time are not subject to the SOF –b/c it is possible you might die within a year
***Admission to pleadings that a contract exists under common law is not sufficient to bar the SOF –under UCC it will
***Disadv. of SOF –parties who are not aware of the statute may agree to an oral agr. and if later the deal falls thru they may be out of luck if later they seek to enforce it
Analysis of a SOF Question
1. Is this contract subject to the SOF (if the answer is no, the contract is enforceable even if it is not in writing, so the analysis need proceed no further; but if the answer is yes, the next question must be asked.)
2. Is there a signed writing in a form sufficient to satisfy the statute? (If the answer is yes, the contract is enforceable. If no, the contract is not enforceable unless the third question can be answered affirmatively.)
3. Do any recognized exceptions to the SOF apply?
Statute of Frauds has 3 reqs.
1. Writing –although most statutes refer to a writing in the singular, it is generally accepted that the complete written memorial of the contract need not be contained in a single document; it can be pieced together from several related documents
Res. 2nd § 132 –the memorandum may consist of several writings if one of the writings is signed and the writings in the circumstances clearly indicate that they relate to the same transaction.
“ § 133 –states that the statute may be satisfied by a signed writing not made as a memorandum of contract
***even an internal memorandum or an informal letter to a third party could qualify
2. Signature –must be signed by the party against whom the contract is to be enforced –can also be signed by the agent of the party to be charged –but most statutes require that the agent be authorized in writing to sign on behalf of the party -***document need not be signed by both parties –as long as the party who is denying the contract has signed it
Res, 2nd § 134 –defines sig. to include any symbol made or adopted with an intention, actual or apparent, to authenticate the writing as that of the signer. (same in the UCC) e.g. initials, digital fingerprint, sig. can be made writing, printing, stamping, or other means –where the writing consists of more than one document, the sig. need not appear on every document as long as the document on which it appears can be tied to the other documents.
3. Content
Res. § 131 –the writing need not be full and complete as long as it has enough content, at a min, to prove that a contract was in fact made, and to identify its subject matter and reveal its material terms. -e.g., names of the parties
-if you do not have the names of the parties you cannot enforce the contract –would not include sufficient material terms
Transactions Governed by the SOF
– Sales and Transfers of Land
Res., 2nd § 125 (1) states a promise to transfer to any person any interest in land is w/i the SOF.
Roberts v Karimi (1999) –oral agr. for the sale of d’s house –Realtor drafted an agr. of sale, but it was never signed by d, who later reneged -subsequently the p (buyer) sued the d for specific performance -seller had signed an affidavit that the realtor had located a buyer -a memo. Of sale was drafted which stated purchase price, contingency involving termites, and when commission came due and owing-in addition the d wrote his attorney saying the house is sold as is.
Key Points
1. Ct wanted to make sure the d could not use the SOF to avoid a valid oral agr.-looked at the purpose of the SOF –was satisfied with the signed affidavit and letter to attorney –however
2. An apparent agency agreement is not sufficient to satisfy the SOF, there needs to be a signed agency agreement to satisfy the statute of fraud.
3. For those who successfully if he wins on the SOF he
nt against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.
(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable
(a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or
(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or (not in common law)
© with respect to goods for which payment has been made and accepted or which have been received and accepted
(4) A contract that is enforceable under this section is not unenforceable merely b/c it is not capable of being performed within one year or any other period after its making.
UCC 1-201 General Definitions
“Signed” includes any symbol executed or adopted by a party with present intention to authenticate a writing.
How does the UCC differ from Res 131? -have to have specific terms
UCC –writing is not insufficient because terms are incorrect –however quantity must be stated –discrepancy of quantity does not render it unenforceable if you state 50 in the writing but you really were supposed to get 100 –you can only enforce up to 50
Exceptions to the SOF
Part Performance -one of the ways in which courts have sought to soften the impact of the SOF is by acknowledging that under some circumstances, conduct by the parties following the alleged oral agr. may itself provide enough proof of the contract so as to dispense with the need for a writing.
