CONTRACTS II OUTLINE
Once there is a contract then what?
Statute of Frauds
Original rule (1677) is that a K w/in its scope may not be enforced unless it is written and signed by the party to be charged
Intended to prevent falsely alleged contract through perjured testimony
However if K really was made but oral, someone trying to get out of K could try to use Statute of Frauds to get out of it
Statute of Frauds not intended as an escape route for persons seeking to avoid obligations undertaken or imposed by them
Failure to conform with the Statute of Frauds will cause the promise to be rendered unenforceable, even though it is supported by consideration
Compliance w/statute of frauds is different than adequate proof of K for purpose of relief. Modern SoF consists of many statutes requiring agreements to be memorialized and signed.
Steps to analyzing Statute of Frauds Problems
1. Does the contract fall w/in the Statute of Frauds
If no, oral contract is enforceable
2. Is the contract reflected in a writing that satisfies the statute of frauds?
If yes contract is enforceable
3. If no, does the case fall within one of the exceptions to the statute of frauds that permit enforcement despite non-compliance? (perf. or reliance by plaintiff)
If yes, contract is enforceable; If no, not enforceable
Step 1 – Types of Contracts that fall w/in the Statute of Frauds – covered in Restatement 110
Contracts for the sale of land or an interest in land.
Contracts that cannot be performed in a year – Restatement 130
Any K, irrespective of its subject matter, must comply w/the statute of frauds if it cannot be performed w/in a year of its execution
Ex: if customer makes contract to stay at resort on july 3, 2003, to rent a room on july 4, 2004, it falls w/in statute à must be in writing
Ex: Crabtree case – two year K for employment fell under statute
However, a K is not subject statute of frauds if it possible that it can be performed in one year. The fact that a K can be terminated in one year is not sufficient to remove it from SoF; only performance
Ex: Thus five year K, although can be terminated in less than year b/c of breach, still is subject to SoF
Contracts for the sale of Goods UCC 2-201 (over $500 must be in writing)
UCC – 2-201 K for sale of goods over 500, 8-319 K for securities, 1-206 is personal property not otherwise covered (something about 5,000K ??) (Ambass. Outline)
K of an executor/administrator to answer for duty of decedent. (AO)
K to answer for duty of another (suretyship) and K for marriage (AO)
Step 2 – If the statute applies, is the K reflected in a writing that satisfies its requirements?
There is no formal requirement that writing has to be on a certain medium
A penciled note on bathroom tissue is fine
The writing satisfies the statute of frauds by a series of correspondence or other linked writings à doesn’t have to be in one writing
When the writing consists of several pieces of paper or other records (such as a series of notes, letter, emails), it is not necessary that every piece has been signed, provided that it appears from the writings themselves that they all refer to same transaction (AO says if they are connected with one another expressly or by internal evidence of subject matter and occasion) à Rule from Crabtree v. Elizabeth Arden , Restatement 132
In Crabtree, Unsigned office
suffers detriment, sometimes applies to enforce a promise in an oral K that is otherwise unenforceable b/c of its non-compliance with the Statute of Frauds.
A promise which the promisor should reasonably expect to induce action or forbearance on part of promisee or third person and which does induce action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the promise.
Factors to consider in determining whether injustice can only be avoided through enforcement of promise (Restatement 139 (2)):
1. availability of other remedies, such as restitution
Where plaintiff has rendered partial performance to def. pursuant to K unenforceable by SoF, courts ordinarily grant plaintiff restitution for reasonable value of part. performance
2. definite and substantial character of action
3. extent to which action corroborates evidence of promise, or the promise is established by clear and convincing evidence
4. the reasonableness of action
5. the extent to which the action was foreseeable by promisor
Plaintiff’s burden in overriding Statute of Frauds by promissory estoppel is to establish promise’s existence by clear and convincing evidence.
Insures that P.E. won’t render SoF superfluous in employment context