Business Law 1 // Ch. 16 The Writing Requirement in Our Digital World
What is the One-Year Rule?
A contract that cannot, by its own terms, be performed within one year from the date it was formed MUST BE IN WRITING
What must be contained in the writing?
A memorandum or note evidencing an oral contract only needs the essential terms of the contract, not every team there must also be some indication that the parties voluntarily agreed to the terms.
What constitutes a writing?
A writing can consist of any order confirmation, invoice, sales slip, check, fax, or e-mail -- or such items in a combination. Several documents may form a single contract if they are physically attached, such as by staple, paper clip, or glue. Several documents may form a single contract even if they are only placed on the same envelope.
What are the contracts that are required to be in writing, MUST BE IN WRITING or evidenced by a written memorandum or electronic record?
1) Contracts involving interests in land. 2) Contracts that cannot by their terms be performed within one year from the day after the date of formation. 3) Promises made in consideration of marriage 4) Under the Uniform Commercial Code (UCC), contracts for the sale of goods priced at $500 or more. 5) Collateral, or secondary contracts.
A _______________________ is one that is ancillary (subsidiary) to a principal transaction or primary contractual relationship.
Collateral Promises Collateral promises of this nature fall under the statute of frauds and must be in writing to be enforceable
What is Real Property?
Land is real property and includes all physical objects that are permanently attached to the soil
A promise to pay another person's debt that is not conditioned on the person's failure to pay (or perform) is a ____________________.
Primary Obligation Go to the person right now
An oral contract that would otherwise be unenforceable under the Statute of Frauds may be enforced in some states under the Doctrine of _________________.
Promissory Estoppel If a person justifiably relies on another's promise to his or her detriment, a court may estop (prevent) the promisor from denying that a contract exists.
A promise to pay another's debit only if that party fails to pay is a ____________________.
Secondary Obligation wait to pay until Nov. 30.
Exceptions to the writing requirements are made in certain circumstances. When a contract has been partially performed and the parties cannot be returned to their positions prior to the contract's formation, a court may grant _____________________. This is an equitable remedy that requires performance of the contract according to its precise terms.
Specific Performance
Every state has a statute that stipulates what types of contracts must be in writing in order to be enforceable We refer to such a statute as the _______________________
Statute of Frauds Statute of Frauds was implemented to prevent fraud!! Courts look at the contract The statute denies enforceability to certain contracts that do not comply with its writing requirements.
T/F If a party against whom enforcement of an oral contract is sought "admits under oath that a contract for sale was made, the contract will be enforceable.
TRUE
T/F A written contract will satisfy the writing requirement, as will a written memorandum or an electronic record that evidences the agreement and is signed by the party against whom enforcement is sought.
TRUE A signature can consist of a typed name or even just initials
T/F A unilateral promise to make a monetary payment or give property in consideration of a promise to marry must be in writing.
TRUE Same goes for Prenuptial Agreements
What happens when the performance of a contract is objectively possible during the one-year period?
The Contract must be in WRITING TO BE ENFORCEABLE
What else must be contained in the writing?
The ESSENTIAL TERMS: quantity, signed by the party to be charged, names of the parties, subject matter, consideration. Sales of Land must state the price and description with sufficient clarity to allow them to be determined without reference to outside sources. Legal description survives anything that is on the land.
What is the main purpose of the statute of Frauds?
The primary purpose of the statute is to prevent harm to innocent parties by requiring written evidence of agreements concerning important transactions.
A writing evidencing the contract for the sale of goods need only to state what?
The quantity and be signed by the party against whom enforcement is sought
Under contracts for the Sale of Goods, the ______________________________ requires written evidence or an electronic record of a contract for the sale of goods priced at $500 or more.
Uniform Commercial Code (UCC) $500 was what they determined the a written memorandum will suffice, provided that the writing is signed by the party against whom enforcement is sought.
A contract for the sale of land is not enforceable unless what?
Unless it is in writing!