ACCT 324 - Smartbook Ch. 18 - Contracts in Writing

In which of the following forms a written contract may be considered evidence under the statute of frauds?

- It can consist of several documents. - It can be a single document. - It must contain certain specific elements, such as all contractual terms.

The following transfer in interests in land fall within the statute of frauds?

- Mortgage contracts - Lease contracts

What states have not passed legislation to incorporate a statute of frauds in their state code?

- New Mexico - Louisiana

What are the elements of the statute of frauds exception for promissory estoppel?

- One party detrimentally relied on an oral promise. - The detrimental reliance of the injured party could have been foreseen by the other party.

Secondary obligations are also known as:_______.

- Suretyship promises - Collateral promises

Under the parol evidence rule, oral testimony is inadmissible to prove certain terms or agreement if it comes: _______.

- before the existence of a written contract. - at the same time as the execution of the written contract.

The origin for our statute of frauds was the English law, Act for the Prevention of Frauds and Perjuries, which was passed in: _______.

1677

How many exceptions to the parol evidence rule are there?

8

What is not a valid exception to the statute of frauds?

A contract that is unprofitable to all parties

What constitutes a valid admission under the statute of frauds?

An admission is a statement under oath or as part of a legal process in which a party being sued admits the existence of a contract.

Identify the state that does not allow the admission exception as part of the statute of frauds.

California

In the context of the statute of frauds, which of the following is an exception to the requirement of a written contract under UCC?

Contracts between merchants selling goods to one another

What must be done in relation to contracts involving an interest in land?

Contracts involving an interest in land are covered by the statute of frauds, and as such, must be in writing.

Promissory estoppel requires what major element in order to exist?

Detrimental reliance by the injured party

True or false: Primary obligations are within the statute of frauds and, therefore, must be in writing to be enforceable.

False

In which of the following situations is parol evidence contradictory to the final terms admissible?

If the oral agreement was made subsequent to the creation of the contract

The statute of frauds is found in what federal code?

It is not found in any federal code, but rather is encompassed in state statutes and state common law.

Which of the following statements is true of the parol evidence rule?

It prevents evidence that substantially contradicts the agreement in its written form.

______ obligations do not require a written document.

Primary

What section of the UCC requires contracts in excess of $500 to be in writing?

Section 2-201

If there is a property interest attached to a marriage contract, then what is true about the contract?

The contract must be in writing.

What will a court use to determine if a contract is void or voidable?

The court will admit parol evidence to determine if a contract is void or voidable.

What is one way in which parties can create an integrated contract?

The parties can include a merger clause in the written contract.

If a fully integrated agreement has been written, then what is the presumption?

The presumption is that no oral evidence can be admitted to change terms of contract.

Which of the following is true of the states that do not consider merger clauses to be binding?

They consider merger clauses to be recommendations.

According to ______, parol evidence is admissible for the sake of clarification if it addresses prior dealings between the parties or usages of trade in the business they are in.

Uniform Commercial Code (UCC)

According to ______, situations that require contracts in writing include the lease of goods and the sale of securities and personal property if the price is greater than $5,000.

Uniform Commercial Code (UCC)

In the context of exceptions under UCC, which of the following contracts is enforceable even if it is an oral contract?

When a merchant sells goods to another merchant

When is promissory estoppel in effect?

When the party's reliance is to her own detriment

Which of the following clauses seeks to blend other agreements either into a final agreement or into something explicitly identified as being outside the final agreement?

a merger clause

A(n) ______ is a statement made in court, under oath, in which one party against whom charges have been brought admits that an oral contract existed, even though the contract was required to be in writing.

admission

If there is a an obvious typo in a written contract, the court will: _______.

admit parol evidence to correct the typo

If a written agreement has missing parts, the court will: _______.

admit parol evidence to fill in missing parts

If oral evidence is being offered to clarify an ambiguous term in a written contract, then the court will: _______.

admit the oral evidence

When calculating the length of time it will take for performance on a contract to determine if the contract falls within the scope of the statute of frauds, the start date for calculating time will be the day: _______.

after the contract is created

Under the equal dignity rule, if an agreement would have to be in writing if negotiated by a principal, then it would also have to be in writing if it were negotiated by a(n)

agent

Contracts made in consideration of marriage ______ subject to the Statute of Frauds.

are

Unlike the statute of frauds, when the UCC makes an exception when parties admit to the existence of an oral contract, it provides that a contract required to be in writing but admitted to in court will ______.

be enforceable only for the quantity admitted

If the written contract has ambiguous terms, the court allows oral evidence for the purpose of ______.

clarifying the contract

A written agreement under the parol evidence rule is presumed to be: _______.

complete

What kind of contract has an event or occurrence that must occur before the contract can be executed?

conditional precedent contract

The partial performance exception to the statute of frauds deals with: _______.

contracts with a property interest

For examination of statute of frauds applicability, the one year period begins the day after the contract is ______, not when it is scheduled to begin.

created

A prenuptial agreement involves a contract before marriage: _______.

dealing with property rights

Once a fully ______ agreement has been written, no oral evidence of any prior or contemporaneous agreement can be admitted in court to change the terms of the agreement.

integrated

The partial performance exception to the statute of frauds covers contracts: _______.

involving property interest

In order to have promissory estoppel, the agreement: _______.

is not otherwise an enforceable contract

One of the benefits of the statute of frauds is that it: _______.

makes contractual negotiations easier by ensuring all the specific terms of a contract are written and aware to all parties

A(n) ______ explicitly states that the written contract is intended to be the complete and final version of the contract between the parties and that other possible agreements between the parties, besides the one in question, are not part of the final written agreement.

merger clause

If there is something in addition to a promise to marry as part of a marriage agreement, then the agreement: _______.

must be in writing

In order to be considered exempt from the statute of frauds, a contract: _______.

must be possibly performed in one year, even if the performance is highly unlikely

A normal marriage agreement is typically a(n): _______.

mutual promise that does not fall within the statute of frauds

Most states will allow a merger clause to constitute the stated intent of the parties unless ______.

one party offers proof of a personal defense against the contract

What is the common law rule that bars the admission of oral testimony to prove agreement to certain terms if there is a written contract between the parties after the oral testimony occurs?

parol evidence rule

What rule allows for oral evidence to prove that a written contract was based on oral terms?

parol evidence rule

Like the statute of frauds, the ______ evidence rule allows for eight ______ that would be admissible in court.

parol; exceptions

Courts can allow ______ evidence to ______ the missing parts, while not modifying the written agreement in any substantial way.

parol; fill in

A prenuptial agreement is an agreement made by two parties _____ regarding ownership rights to property.

prior to their marriage

In an agreement for the sale of goods over $500, only the _____ needs to be stated.

quantity

In order to meet the written requirements of the statute of frauds, a document needs: _______.

some form of mark as long as it was meant as a signature

In the context of contracts related to an interest in land, the statute of frauds covers ______.

some transfers of interest in land

The term "parol" means: _______.

speech or words outside of the written contract

In the context of the circumstances in which the Statute of Frauds applies, contracts involving secondary obligations are included under _____.

suretyship

What allows for the use of parol evidence to clear ambiguity in a written contract by looking at past business dealings?

the UCC

In addition to the statute of frauds, ______ allows for an admission provision to create a contract that is required, but is not in writing.

the Uniform Commercial Code (UCC)

If the main purpose for taking on a secondary obligation is personal benefit, then

the agreement does not fall under the statute of frauds and does not have to be in writing.

In some states, under ______ contracts that would normally fall under the statute and need a writing if negotiated by the principal must be in writing even if negotiated by an agent.

the equal dignity rule

The title "statute of frauds" is misleading because: _______.

there is not one statute, but rather the statute of frauds is a general collection of concepts that has been incorporated at the state level

Consideration for a prenuptial agreement offers evidence that both parties have agreed: _______.

to all the terms of the agreement, and the agreement is not biased in favor of one party

Judges will typically handle an agreement that consists of both written and oral elements by: _______.

treating the contract as not finalized and assuming the parties do not intend to have the written part represent the entire agreement

Parol evidence is admitted to determine whether a contract is ______.

voidable or void

What is a main purpose of the statute of frauds?

To prevent parties from entering into contracts with which they do not agree

The test for compliance with the one-year rule considers the ______.

possibility of completing the contract within one year

When a contract is based on a future event occurring first, then that future event is called a condition ________.

precedent

A purpose of the statute of fraud is to ______.

prevent unreliable oral evidence from interfering with a contractual relationship

A benefit of the statute of frauds to enforcement of a contract is that it

prevents unreliable oral evidence from interfering with a contractual relationship.

Under exceptions under the UCC, oral contracts for ______ are enforceable even if they would normally have to be in writing.

customized goods

Unlike secondary obligations, primary obligations ______.

do not need to be in writing

Which of the following is true of prenuptial agreements?

They do not require consideration legally.

Identify an exception to the need to have the secondary obligation in writing.

the main-purpose rule

In contracts for the lease of goods or the sale of securities, the UCC indicates that if the contract is over ______, it must be writing.

$5,000

Which of the following are exceptions to the statute of frauds?

- Admission by one party to a contract - Partial performance on a contract - In an instance where promissory estoppel has been established

What states do not allow the admission exception as part of the statute of frauds?

- California - Louisiana

Identify the circumstances in which the Statute of Frauds applies.

- Contracts related to an interest in land - Contracts involving secondary suretyships

What are the types of contracts that fall within the scope of the statute of frauds?

- Contracts related to an interest in real property - Promises made in consideration of marriage

What are the reasons why a partial performance exception to the statute of frauds could be applied?

- Partial payment for a contract involving an interest in land - Buyer has taken possession of a land interest as part of a contract

What are the elements of a written agreement under the statute of frauds?

- Parties to a contract must be identified. - All pertinent terms must be listed. - The subject matter of the agreement must be defined.

Which of the following does not fall within the statute of frauds and as such, the contract does not have to be in writing?

- Secondary obligations where the main reason is to obtain a personal benefit - Primary obligations

Which of the following are not elements of a written agreement under the statute of frauds?

- The agreement must be signed by an agent, not the principal to the contract. - The agreement must be profitable for both parties.

Identify a true statement about integrated contracts.

- They are considered complete. - They are in written form.

Which of the following is true of marriage agreement based on mutual promises?

- They do not need to be written. - They do not fall within the statute of frauds.

Which of the following is true of secondary obligations?

- They fall within the statute of frauds. - They involve a party outside a primary agreement.

Identify what would be considered part of "land" under the statute of frauds.

- Trees on the land - Buildings on the land

Within the statute of frauds, the term "land" means: _______.

- anything attached to the parcel of property, such as trees and buildings - the land and soil itself of a parcel of property

"Oral contracts between merchants selling goods to one another need not be in writing." Which exception to the statute of frauds does the given statement indicate?

Exception under UCC

The exception to the statute of frauds that is applicable when a buyer of land has paid a portion of the sales price to prove the existence of a contract is: _______.

partial performance

For a contract to be enforceable under the statute of frauds, the signature ______.

can be an initial as long as it is intended as a signature

When a written agreement was conditioned on terms agreed to orally, the parol evidence rule allows parties to introduce evidence because such evidence ______.

does not substantially modify the written agreement

One of the main purposes of the statute of frauds is to prevent parties from: _______.

entering into contracts to which they do not agree

According to the statute of ______, if a contract can possibly be performed within one year, the contract does not need to be in writing in order to be enforceable.

frauds

The purpose of a merger clause is to: _______.

give direction to a judge that the written contract is intended to be the final and complete statement of the agreement

The written requirement under the statute of frauds can be demonstrated by: _______.

having several written documents as part of a contractual agreement

Whenever a written agreement contains a serious and obvious typographical error, ______ evidence is admissible to demonstrate it was an error, as well as to set forth the proper term.

parol

A court will allow what type of evidence to prove a subsequent modification of a written contract?

parol evidence

The word parol in the "parol evidence rule" refers to ______.

the spoken words outside of the original writing of a contract.