I Statute of Frauds
A forbids enforcement of certain types of Ks unless written K or “written memorandum.” It is applicable (with variations) in every state. (CISG Art. 11 says Int’l Ks need not be in writing—thus destroying SOF)
B Five Categories of Ks that fall within SOF (R2d §110):
1 Suretyship – (a K to answer for the debt/duty of another)
2 Marriage
3 Land – (R2d §129)
4 One Year – a K that cannot be performed within one year from its making (R2d §130)
a Clock starts when K is signed: “one year from the date of making thereof”
b Because contract can always be terminated, termination cannot be defining characteristic. Do not view term provisions as characteristic.
c Key question: Can it be performed within a year?
5 Other Ks as required by individual state law
6 UCC requirements
a a contract for the sale of goods over $500 (UCC §2-201)
b Sale of securities (UCC § 8-319)
c Sale of personal property not otherwise covered, to the extent of enforcement by way of action or defense beyond $5k in amount or value of remedy (UCC § 1-206)
C ANALYSIS:
1 First, is the K one that the SoF applies to? (one of the 5 categories)
a If no : SOF not applicable – π can prove the K through evidence
b If YES: is SOF “satisfied”? – (are there written terms signed by party to be bound (Δ))
2 Satisfaction of SoF by a Memorandum (R2d §131): (Crabtree v. Elizabeth Arden)
a Reasonably identifies the subject matter
b Indicates that a K has been made between the parties
c States with reasonable certainty the essential terms of the K
d Is signed by the party to be bound
e The memo can consist of several writings if one of the writings is signed and the writings clearly indicate that they relate to the same transaction (R2d§ 132)
f Except marriage provision, can satisfy statute through writings not memo of K (letter, offer, repudiation of K, diary entry, minutes of meeting, etc.) (R2d § 133)
g What constitutes a signature (e-docs, e-sign) (R2d § 134)
3 Second, if the SoF isn’t satisfied, are their other factors, which might invoke an exception?
a Enforcement by virtue of action in reliance (R2d §139):
i Promissory Estoppel: If one party to a K foreseeably and reasonably relies to his detriment on the existence of the agreement the court may enforce the agreement if it’s the only way to avoid injustice (Alaska Democratic)
b Enforcement by Performance (contract is executed already)
D CASES:
1 CRABTREE V. ELIZABETH ARDEN
a (Crabtree was hired by Arden with terms written in an informal memo agreeing to a term of 2 years, pay increase f
evidence in interpreting what each party knew or should have known about each other’s intent
C Four Corners Rule – only things within four corners of K should be used
D Integration: has to do with whether written K contains complete understanding of parties regarding subject matter. Is document complete?
E Versions of the parol evidence rule:
1 Restrictive View – four corners rule, and extrinsic evidence may be used for interpretation only upon a finding that some language in the K is patently/facially unclear, ambiguous or vague (Willistonian View)
2 Modern View – bring on the parol evidence and let the judge consider it and determine whether there is an ambiguity that may not be obvious on its face (Corbinian View)
F When to admit/not admit:
1 Clarifying evidence: ALWAYS YES
2 Contradictory Evidence: ALWAYS NO (also includes adding new terms)
3 Supplemental Evidence: if not fully clarified, you can. look to whether agreement is partially or fully integrated
G Exceptions – when Parol Evidence Rule does not apply (R2d § 214) (pp. 390-92)
