Statute of Frauds

International Casings Group, Inc. v. Premium Standard Farms, Inc. US District Court, Western District of Missouri (2005)

Issue: Rule: Conclusion:

UCC 2-201, Section F

In essence, it requires that there must be a written memorial of the transaction, signed by the party against whom enforcement is sought, sufficient to indicate that the parties have made a contract of sale.

Restatement, Second § 131. General Requisites of a Memorandum

A contract within the Statute of Frauds is enforceable if it is evidenced by any writing, signed by or on behalf of the party to be charged which (a) reasonably identifies the subject matter of the contract, (b) is sufficient to indicate that a contract with respect thereto has been made between the parties or offered by the signer to the other party, and (c) states with reasonable certainty the essential terms of the unperformed promises in the contract.

UCC 2-201. Formal Requirements: Statute of Frauds

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6 Types of Contracts Covered by the Traditional Statute of Frauds

1- Contracts to answer for the debt or obligation of another. 2- Contracts of executors or administrators to answer for the duty of their decedents. 3- Contracts made upon Consideration of Marriage (prenuptial agreements). 4- Contracts for the sale of land or the transfer of an interest in land. 5- Contracts that cannot be performed within a year of execution. 6- Contracts for the sale of goods for the price of $500 or more. (UCC 2-201). +++++++++++++++++++++++++++++++++ Marriage Year or more Land transfers Executor of a will to pay with own money Goods over $500 Surety +++++++++++++++++++++++++++++++++

Methodology of Applying the Statute

1- Is the contract subject to the statute of frauds? If no, the contract need not be in a record to be enforceable, and the analysis need proceed no further. If yes, the next question must be asked. 2- Is there a signed record in a form sufficient to satisfy the statute? If yes, the contract is enforceable. If no, the contract is not enforceable unless the 3rd question can be answered affirmatively. 3- Is there a recognized exception tot he Statute of Frauds that will allow enforcement of this contract even though it is subject to the statute and there is no record sufficient to comply with it?

Statute of Frauds Requirement

1- Writing or Record 2- Signature: must be signed, at least by, the person who is denying the contract. 3- Content: does not have to be full and complete, provided that (a) it has enough content to show that a contract was made, (b) it identifies the subject matter, and (c) sets out its material unperformed terms. RST, Second § 131

UCC 2-201(1)

The omission or incorrect statement of a term does not make the writing insufficient, but the contract is not enforceable beyond the quantity stated in writing.

Statute of Frauds: the basic principle

The purpose was to ensure that a person could not falsely claim, on the basis of perjured oral evidence, that a contract covered by the act had been entered into and in the interest of judicial economy. CON: Enforcing a written agreement may frustrate the oral agreement.