STATUTE OF FRAUDS
DEF: a statute that requires specified types of K’s to be in writing in order to be binding (Restatements 110; 303-314)
CLASSES OF CONTRACTS COVERED:
(3) marriage proposal
(4) land contract
(5) over one-year à has to be performed! (not terminated)
(6) sale of goods over $500
1) Is the K at issue one of the types to which the Statute of Frauds applies, so that a signed memorandum will be required for its enforcement?
no – do not apply statute of frauds
yes – (go to 2)
2) Is the Statute of Frauds satisfied?
(is there some sort of written statement of its terms signed by the “party to be bound” – think crabtree)
no – (go to 3)
yes – K enforceable
Ø Can also be electronic (E-Sign act à any symbol, pretty broad standard)
3) Are there other factors in the case, such as performance or reliance by P, which might
invoke an exception?
(the P will still have to prove their case – the parties went thru with the K and to not enforce would be unjust!)
no – K not enforceable
yes – K enforceable
§2-201: The Sale of Goods Statute of Frauds
§110: Classes of contracts covered
§130: Contract Not to Be Performed Within a Year
§131: General Requisites of a Memorandum
§132: Several Writings
§133: Memorandum Not Made as Such
Crabtree v. Elizabeth Arden Sales Corp.
Facts: Crabtree was hired by Arden to be Arden’s sales manager. No formal K was
signed but separate writings pieced together showed Crabtree to have been hired for a 2-year term w/ pay raises after the first and second 6 months. When Crabtree did not receive his 2nd pay raise, he sued for damages.
Rule: Separate writings, connected as to subject matter and occasion, may be pieced
together to find an enforceable K under the Statute of Frauds.
Ø Takes majority view à since sufficient connection since there is a mere reference (as opposed to the minority view where reference needs to be sufficient specificity!). The criticism here is that you can read crabtree liberally where any document can be linked!.
Alaska Democratic Party v. Rice
Facts: When Rice was promised a job that never materialized, she sued on a theory of PE.
Rule: A promise which the promisor should reasonably expect to induce action or
forbearance on the part of the promisee or a third person and which does
induce the action or forbearance is enforceable notwithstanding the Statute of
Frauds if injustice can be avoided only by enforcement of the promise ;
Rule: P’s burden is clear and convincing evidence; So this is an exception to the SOF since ct used PE
[restatements 325, section 139]
Impt notes à CISG international goods; UCC domestic goods. Article 11 of CISG states that you DON’T need in writing (thus no SOF). Shows that U.S is reluctant to trust human nature
PRINCIPLES OF INTERPRETATION
Rule of Interpretation: READ THE LANGUAGE AND USE COMMON SENSE
§201: Whose Meaning Prevails àif both agree, use that meaning!
§202: Rules in Aid of Interpretation
§203: Standards of Preference in Interpretation
§204: Supplying an Omitted Essential Term
§206: Interpretation Against the Draftsman
§207: Interpretation Favoring the Public
PRINCIPLES OF INTERPRETATION:
1) purpose – to get to what the parties meant
2) subjective – the meeting of the minds
~ kicked out, b/c hard to know what is in someone else’s mind
3) objective –
4) modern – hybrid approach
~ did the parties agree on the meaning (go ahead and use that meaning)
CANONS OF INTERPRETATION: (pg 358)
1) Noscitur a sociis: a word in a series is affected by others in the same series; or
a word may be affected by its immediate context.
2) Ejusdem generis: a general term joined w/ a specific one will be deemed to include only
things that are like the specific one;
3) Expressio unius exclusion alterius: if one or more specific items are listed, w/o any more
general or inclusive terms, other items although
similar in kind are excluded.
4) Ut magis valeat quam pereat: an interpretation that makes the K valid is preferred to
one that makes it invalid.
5) Omina praesumuntur contra proferentem: if a written K contains a word or phrase which
is capable of two reasonable meanings, one of which favors
Rule: The party who seeks to interpret the terms of the K in a sense narrower than
their everyday use bears the burden of persuasion to so show, and if that party
fails to support its burden, it faces dismissal of its complaint.
PAROL EVIDENCE RULE
DEF: excludes extrinsic evidence, exceptions prevail;
doctrine precluding parties to an agreement from introducing evidence of prior or
contemporaneous agreements in order to repudiate or alter the terms of a written K.
general rule: anything outside of the “four corners” is excluded, we can always bring in
information to clarify, if the agreement is fully complete or integrated then you can bring in no more information except that which is meant to clarify terms/items
can always bring in information to clarify
if an incomplete agreement then can bring in parol evidence to supplement
evidence outside the written word, usually it is oral evidence;
– parol evidence can be anything else and oral conversations
usually oral evidence is not admissible;
– Why?, Lord Byron: “the slippery slope of memory”
always looking for a merger agreement
exceptions: fraud, duress, undue influence, incapacity, mistake, or illegality
traditionalist: only if there is a patent ambiguity, then can bring in information to clarify
modern: bring me anything to clarify, no matter if the ambiguity is patent or latent
PAROL EVIDENCE: extrinsic evidence outside the “four corners” of the K;
EXTRINSIC EVIDENCE: evidence that is not contained w/in the text of a document or K
but which is derived from the parties statements or the circumstances under which the agreement was made
anything outside the “four corners” of the written agreement;