Contracts II Outline

I. DEFENSES:
a. Statute of Frauds: (purpose on p. 355)
i. R2K § 110: types of Ks that need to be in writing to avoid fraudulent claims, prove existence of K. Evidentiary
i. Executive Administrator
ii. Suretyship
iii. Land K
iv. Marriage
v. K that can’t be performed within 1 year
vi. Ucc 2-201: K for goods more than $500
ii. R2K § 130: 1 year provision
i. K of unknown/unspecified duration are simply excluded
ii. Covers only those Ks whose performance cannot possibly be completed within 1 year
iii. 1 year count begins at moment of formation (offer, acceptance, and consideration)
iv. In a K for multiple promises, if even 1 promise cannot possibly be performed within 1 year [aka falls under SOF], all promises in the K fall under SOF
i. Exception: 1 year provision does not apply to K where one side fulfills his end of the K immediately upon formation, whether performance by the other party is completed within 1 year or not
ii. [If one party has fully performed within a year (like at formation), SOF 1 year provision applies to all promises in K] iii. R2K § 131: General requisites of K
i. Signed
ii. Identifies subject matter of K
iii. Sufficient to indicated that K has been made between parties
iv. States with reasonable certainty the essential terms of K
i. Essential terms can be stipulated by statutes for different kinds of K
iv. R2K § 139:
i. SOF can be enforced in K that does not necessarily meet all these terms if enforcing the K is the only way to avoid injustice under the circumstances
ii. Factors:
i. Availability/adequacy of other forms of resolution
ii. Relative fairness/equality between the harm suffered versus remedy sought
iii. Evidence that K actually existed (indisputability of K formation)
iv. Reasonableness of committing the harm
v. Extent to which harm was foreseeable to promisor
v. Radke v. Brenon: D offering to sell parcel to P in a letter. O orally agrees, even after P increase. D revokes, no written K.
i. Statute requires writing express the consideration.
ii. The memo is written, includes parties names, description and price of property, signature (Brennon typed his name)
i. This would not normally be enough, but there is oral proof too
ii. defense not applicable if D admits under oath the elements of the K
iii. Too much evidence against D
iii. Brenon wouldn’t have been able to enforce against Radke b/c oral acceptance doesn’t meet statute of frauds.
iv. Williston: statute was intended to guard against perjury…If after consideration of all circumstances the court concludes that enforcement of the agreement will not subject the defendant to fraudulent claims, the purpose of the statute will be best served by holding the note or memo sufficient even though it is ambiguous or incomplete
vi. McIntosh v. Murphy:
i. HI SOF states that K must be in writing and if cannot be performed within 1 year in order to be enforceable (from day the K was entered).
i. Must be impossible to perform in a year
ii. D hires P with one year oral contract. P moves from L.A. and fired to 2 months later
iii. P sues D for breach, D says that K is void didn’t satisfy statute of frauds.
iv. Cts mitigate the harshness of the rule
v. R2K § 139: enforcing K is the only way to avoid injustice; therefore K falls under SOF
i. Promisor knew that oral promise induced action or forbearance on other party
ii. To determine whether injustice can be avoided only by enforcement of the promise, look at multifactor in section 2 of 139.
vi. Ct enforces K, no other way to relieve injustice
i. P now in HI w/o job
vii. Jury to decide if K was for a year or terminable at will
b. Fraud, Misrepresentation, Non-Disclosure: Unenforceable K’s
i. Types of misrepresentation:
i. Deceit/Fraud: requires some degree of culpability
i. P has burden of proving D made false statements that were likely to deceive P
ii. Material misrepresentation: can be innocent or intentional
i. Material when misrepresentation is likely to affect the conduct of a reasonable person
iii. Innocent misrepresentation: innocent
i. Speaker actually believes what he is saying
ii. Standards to justify recession in concealment cases:(R2K §161)
i. Concealment must be deliberate/purposeful
i. Failing to correct a mistake the other party is relying on 161(b)
ii. Must be significant or material issue
iii. Problem must be non-observable
iv. Is justice to P unjust for D?
iii. Halpert v. Rosenthal: Halpert, seller, suing Rosenthal the buyer for backing out of the K, bc they found termites in the house. Either go through with K or pay damages (in this case the difference in what Halpert sold the house for and what the Rosenthal’s were going to pay). The buyers had asked multiple times if there were termite issues, seller said no. This an affirmative act. Statement of fact
i. Is innocent misrepresentation, assuming reliance, grounds for recession?
i. Yes; not essential that misrepresentation is knowingly false, assuming reliance. Reliance on positive statements stronger than on opinion.
ii. R2K § 159: Misrepr