Chapter 17 - Writing, Electronic Forms, and Interpretation of Contracts

Statute of Frauds: Contracts that Must be Evidenced by a Writing

(A) Agreement that Cannot be Performed within One Year After the Contract is Made. Statute of frauds is not applicable if a contract may be terminated at will by either party. (1) Oral Extension of a Contract. Burden of proof on the party asserting the modification is a heavy one. (B) Agreement to Sell or a Sale of an Interest in Land. These must be in writing as well as most leases (some for less than one year are excluded). (C) A Promise to Answer for the Debt or Default of Another. Such a promise is is known as surertyship and must be in writing to be enforceable. (1) Main Purpose of Exception: If the main purpose is of the promise to pay is to benefit the promisor, oral contract is binding. (D) Promise By The Executor or Administrator of A Decedent's Estate To Pay A Claim Against The Estate From Personal Funds. Writing not required when the contract is on behalf of the estate. (E) Promises Made in Consideration of Marriage. Prenuptial agreements - have to be in writing to be enforceable Have to have a reasonable amount of time before the wedding to be enforceable. It will take away the argument of duress. You also have to have separate legal counsels. Have to also have full disclosure of assets. Also better off if you disclose income. (F) Sale of Goods. (UCC 2-201) a sale of goods of $500 or more must be in writing to be enforceable. Any item of tangible personable property (G) Promissory Estoppel. you cant rely on promissory estoppel if there is a requirement that it must be in writing (such as a loan) If the states statue matter requires it to be in writing then promissory estoppel wont save you.

Parol Evidence Rule: When the Parol Evidence Rule Does Not Apply

(A) Ambiguity. (B) Fraud, Distress, or Mistake. (C) Modification of Contract. Proof that a contract was modified can be admitted.

Rules of Construction and Interpretation: Conduct and Custom

(A) Conduct of the Parties. Best guide of intent. (B) Custom and Usage of Trade. May be used to interpret but cannot override express provisions.

Rules of Construction and Interpretation: Contradictory and Ambiguous Terms

(A) Nature of Writing. Writing prevails over preprinted forms and quantities in words prevail over figures. (B) Ambiguity. (C) Strict Construction Against Drafting Party. Ambiguous contracts are interpreted against drafting party.

Statute of Frauds: Effect of Non-Compliance

(A) Recovery of Value Conferred. Person providing the good or service is entitled to compensation. (B) Who May Raise the Defense of Noncompliance? Only a party to the oral contract.

Statute of Frauds: Note or Memorandum

(A) Signing. Must be signed by the party sought to be bound by the contract. (The party being sued, so both don't have to sign the contract to make it enforceable) (B) Content. Must contain all essential terms of the contract to satisfy the statute of frauds.

Rules of Construction and Interpretation: Intention of the Parties

Courts strive to determine the intent of the parties. 1. Meaning of Words. Words given ordinary meaning. 2. Incorporation by Reference. Missing terms may be found in another document contract must sufficiently describe it. Intention of the Parties - Four Corners Rule (Looking inside the document itself to see what was intended) Plain meaning rule - if words are other wise defined then they will get the defined meaning. Incorporating by referencing other documents is allowed

Rules of Construction and Interpretation: Implied Terms

Every contract has an implied covenant of good faith and fair dealing. Good faith - comes into play in the performance of the contract. Once you have the agreement you have to perform the agreement in good faith.

Rules of Construction and Interpretation: Avoidance of Hardship

Generally a party is bound by a "bad" agreement, but courts will try to interpret to avoid hardship.

Parol Evidence Rule: Exclusion of Parol Evidence

Generally extrinsic evidence is not allowed to add, modify or contradict terms of a written contract. Parol Evidence rule - You can not introduce prior or contemporaneous evidence to contradict a final written agreement. Merger or Integration Clause - Lawyers incorporating it into writing.

Statute of Frauds: Validity of Oral Contracts:

Oral agreements are generally valid unless the Statute of Frauds requires evidence in writing. Oral contracts exception - when the statute of fraud applies they are not enforceable. Statute of frauds An agreement that cannot be perform within 1 year under the contract. Suppose you have a lifetime contract (orally). It is enforceable because the person could die within that year.