Ch. 18 - Contracts in Writing

Legal Principles

1. If a contract can't be POSSIBLY performed within a year, even if such performance is highly unlikely, then the contract doesn't need to be written to be enforced. 2. Contracts in which one party promises something for another's promise to marry must be written to be enforceable, but mutual promises to marry do not require writing. 3. Primary obligations do not require writing, but secondary obligations do unless the main reason a person makes a secondary promise is to obtain a personal benefit. 4. Once a fully integrated agreement has been written, no oral evidence of any prior agreement can be admitted in court to change the terms of the agreement.

Exceptions to Statue of Frauds (5)

These are exceptions to the Statute of Frauds that prove existence of a contract without a written contract. 1. ADMISSION: Statements made in court, under oath, where someone admits that an oral contract existed, even though it wasn't written and required to be written. 2. PARTIAL PERFORMANCE ON LAND: A buyer of the land has paid a portion of the price and has begun permanently improving the land, or has taken possession of it. These prove the existence of a contract. 3. PROMISSORY ESTOPPEL: One party was detrimentally reliant on the contract, and the other party knew about it. Ex. selling your old house to buy a new house. 4. EXCEPTIONS UNDER UCC: (1) Oral contracts between merchants selling goods to one another doesn't require writing. (2) Oral contracts for CUSTOMIZED goods are enforceable even if they aren't written, but normally need to be.

Types of Final Agreements (3)

INTEGRATED CONTRACT: Written contracts intended to be the complete and final representation of the parties' agreement. When a contracted is deemed integrated, parol evidence is inadmissable. MERGER CLAUSE: A clause that tries to blend other agreements into either a final agreement or outside of the final agreement. This helps courts decide what the final agreement actually is. CONDITION PRECEDENT: When an entire contract is based on something else happening first. Evidence of a condition precedent occurring can be oral.

Equal Dignity Rules

If an agent negotiates a contract ON YOUR BEHALF, it still must be in writing.

Sufficiency of Writing (5 Requirements, 2 Exceptions)

Must have: 1. Identification of parties to the contract. 2. Signature (or initials) 3. Subject matter of the agreement. 4. Any pertinent terms. 5. Consideration (if any). Exceptions: 1. No real specific requirements. 2. Can be made up of several documents.

Contracts within the Scope of Statute of Frauds (5)

1. ONE YEAR - Contracts with terms that prevent possible performance within 1 year of signing. If you can't fulfill a contract in 1 year, it must be done in writing. Exception: Measures the possibility, not the actuality--you could complete a construction project within 1 year w/ enough members, 2. MARRIAGE - Promises made in consideration of marriage; must be in writing to be enforceable. "If you marry me I'll buy you a new car every year" must be written to be enforceable. Prenuptial Agreements must be written. 3. DEBT - Contracts for one party to pay the debt of another if the initial party fails to pay. These agreements must be written. Primary Obligations: Debts incurred in an initial contract; the person who is actually buying the car. Do not need to be written. Secondary Obligations: Cosigners; need to be written. Paying off the debt for someone else that can't. Exception: "Main Purpose Rule": When the purpose for incurring a secondary obligation is to gain personal benefit. 4. LAND - Contracts related to an interest in land. Includes anything attached to the land, like trees and buildings. 5. GOODS - Sale of Goods Totaling More than $500. Only must state quantity to be sold. Buyer, seller, price, and method of payment don't need to be included since ONLY THE QUANTITY IS ENFORCEABLE.

Parol Evidence Rule (Def + 7 Exceptions)

Common Law Rule Prior oral agreements are inadmissible if made before or at the time of the final version of the written contract. Exceptions: 1. Contracts conditioned on orally agreed-on terms. 2. Contracts that are not final bc they are part written part oral. 3. Evidence of prior dealings or usage of trade. 4. Incomplete/ambiguous terms. 5. Contracts that have been modified. 6. Contracts with obvious typos. 7. Voidable/Voided Contracts.

Statute of Frauds (Def, Type of Law, + 3 Purposes)

Requires that certain contracts be written, with sufficient evidence and signatures. If a contract is within the Statute of Frauds, it is not enforceable. THIS IS A STATE LAW. 3 Purposes: 1. EASE CONTRACT NEGOTIATIONS by requiring sufficiently reliable evidence to prove the existence and specific terms of a contract. 2. STOP UNRELIABLE ORAL EVIDENCE from interfering with a contractual relationship. Must be in writing, not oral. 3. STOP PARTIES FROM ENTERING CONTRACTS THEY DON'T AGREE WITH. Since they must write them out and actually sign the contract, it forces careful consideration for both parties.