BUSSL 2550 Chapter 18

Executor-Administrator Provision

- Involves the promise of an executor or administrator of a deceased's estate to answer personally for the obligations of the estate. Such promises are unenforceable unless made in writing. - This is a special application of the suretyship provision.

Introduction to the Statute of Frauds

- Prevents perjured testimony from being introduced to prove a contract - Modernly, provides a defense to enforcement of a contract whose existence is not in dispute - an oral contract is as valid and enforceable as a written agreement

Salient point

- Under the Code, is the price of the modified contract. If the modified price is, say $450, the modified contract is enforceable without a writing. If the modified price is $550, a writing is required. - An oral rescission is effective and discharges all unperformed duties under the original contract.

Judicial Admissions

- if the party resisting enforcement of the contract admits to its existence under proper circumstances, the admission will substitute for a writing - The judicial admission satisfies the Code statutory writing requirement

Modification or Rescission of Contracts within the Statute of Frauds

An oral modification of a contract is unenforceable if the resulting contract is within the Statute. If the new contract would not be within the Statute, an oral modification is enforceable.

Marriage Provision

Applies to a promise to marry in consideration for another promise other than a mutual promise to marry. EX: David promises to pay Sam $10,000 to marry David's daughter Eva. If Sam marries Eva, but David fails to pay the dowry, Sam's breach of contract suit will fail for lack of a writing.

Sale of Goods

Under the Code a writing is sufficient if: a writing is sufficient to indicate a contract was made; is signed by the party against whom enforcement is sought (or by her broker or authorized agent); and specifying the quantity of goods or securities to be sold.

Delivery or Payment and Acceptance

Under the Code, delivery and acceptance or payment and acceptance of part of the goods validates the contract. This applies only to the goods accepted or for which payment has been accepted.

Contracts for the Sale of Goods

Under the UCC, a contract for the sale of goods for $500 or more is unenforceable unless memorialized in a sufficient writing.

Theory and Application

When parties express their final and complete contractual obligations and rights in a writing, the parol evidence rule excludes prior or contemporaneous written or oral negotiations as evidence to change or vary the terms of an integrated contract.

Admission

Where a party to an oral contract for the sale of goods admits to the existence of the contract in its pleadings, testimony, or otherwise admits in court that a contract was made the court will enforce the contract.

Original Contract

Where a promisor makes a promise to perform directing the promisee to perform to a third party, the promise is an original promise and need not be in writing. EX: David promises to pay Eric $2,000 to paint David's son-in-law's house. This is an original promise and need not be in writing.

Full Performance

Where all the promises of an oral agreement have been performed by all parties, the Statute of Frauds does not apply.

Suretyship Provision

a contract wherein a promisor (surety) promises a promisee (creditor) to perform the obligations of another (debtor). EX: Allen tells Baker to extend $10,000 credit to Clark, and adds, "if Clark does not pay on any debt, I will." Allen is a surety and the promise must be in writing to be enforced by Baker

Promissory Estoppel

courts employ the doctrine to overcome the writing requirement where a party seeking to enforce an oral agreement has reasonably and foreseeably relied upon a promise to her/his detriment such that enforcement of the promise is the only way to avoid injustice

What type of contracts does Full Performance only apply to?

executory contracts

Exceptions to the Parol Evidence Rule

subsequent modifications; allegations of fraud; drafting errors or reducing the contract to writing; clarification of ambiguous language and gap filling; partially integrated contracts

Parol Evidence Rule and the Code

the rule may be weakened by the Code's provision allowing a written contract to be explained or supplemented by a prior course of dealing, by usage of trade, or the course of performance

Computation of Time

the year runs from the date the contract is made (entered into), not from the time performance is to begin.

Full performance by one party

where one party renders full performance, the promise of the other party is enforceable, though by its terms it was not possible of performance within one year.

Land Contract Provision

Covers any interest in land: rights; privileges; power; or immunity. So sales contracts, leases, mortgages, options and easements are required to be in writing

Writing Required by the Statute of Frauds

Generally, the party seeking enforcement must be able to show a writing existed at one time. The contract must: specify the parties to the contract; specify the subject matter; specify the price; the general terms of the agreement with reasonable certainty; and be signed by the party to be charged or an authorized agent.

One-Year Provision

If a contract cannot be completed within a year from the date of making, it must be in writing.

Specially Manufactured Goods

If goods are specially manufactured for a buyer courts will enforce an oral contract. The seller must show the goods were made for the buyer and show he/she has made a substantial beginning on the manufacture of the goods.

When would a court enforce the promise to avoid a injustice?

If one seeking to enforce an oral contract for a transfer of an interest in land has substantially changed position in reasonable reliance on the promise

Main Purpose Rule

If the promisor's main purpose is to obtain an economic benefit for herself to which she did not previously have a right, the promise is outside the statute of frauds

Written Confirmation Between Merchants

Merchants often negotiate contracts orally, often by telephone. A written confirmation of the negotiations will satisfy the Statute even though it is unsigned by the party to be charged.

Does the Land Contract Provision apply to transfer of interests in personal property?

No

3 Questions to Ask When enforcement of a Contract is being litigated?

1. is the contract within the Statute? 2. if the contract is within the Statute, is there sufficient written evidence of the contract? 3. if no sufficient writing exists, is there an exception to the statute to make an oral agreement enforceable?

How many days can an objection be made to a written contract of its receipt for the contract not to be formed

10 days

Promise made to a Debtor

A promise made to a debtor is not included in the suretyship provision. D owes a debt to C. S promises D to pay the debt. The promise is enforceable even if oral.

Surety promises

Called collateral promises. The promisor is not primarily liable

Contracts within the Statute of Frauds

Certain categories of contracts must be in writing to be enforceable in a court of law. Such as: promises to answer for the duty of another; promises of an executor or administrator to answer personally for the duty of a deceased person; agreements upon consideration of marriage; agreements for the transfer of an interest in land; agreements not to be performed within one year; and agreements for the sale of personal property for more than $5,000 (UCC).

Part performance

The Code provides for an exception for oral contracts for the sale of goods paid for or received and accepted. An unperformed portion of the contract remains within the Statute