Chapter 15: The Statute of Frauds

Promissory Estoppel

A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies; such a promise is binding if justice will be better served by the enforcement of the promise. A court may prevent the promisor from denying that a contract existed

Prenuptial agreements

Agreements made before marriage that define each partner's ownership rights in the other partner's property

Main Purpose Rule

An exception to the Statute of Fraud. An oral promise to answer for the debt of another is enforceable if the promisor's main purpose is to further his own economic advantage (does not have to be in writing to be enforceable)

Contracts involving interests in land

Any contract that transfers an ownership interest in real property must be in writing under the Statute of Frauds to be enforceable. Must describe the property being transferred with sufficient certainty

Contracts for the sales of Goods

Contracts for sale of goods priced at $500 or more must be in writing. Just has to adequately reflect both parties' intentions

Exceptions to the Parol Evidence Rule

Contracts subsequently modified Voidable or void contracts Contracts containing ambiguous terms Incomplete contracts Prior dealing, course of performance, or usage of trade Contracts subject to an orally agreed-on condition precedent Contracts with an obvious or gross clerical (or typographic) error

The One-Year Rule

Contracts that cannot by their terms be performed within one year from the day after the date of formation must be in writing to be enforceable. If contract is possible to complete in < 1 year, doesn't have to be in writing to be enforceable. If it needs > 1 year, must be in writing to be enforceable

Statute of Frauds

Denies enforceability to certain contracts that do not comply with its requirements (being written). States the following types of contracts MUST be WRITTEN to be enforceable: Contracts involving interests in land Contracts that cannot by their terms be performed within 1 year Collateral/secondary promises or Contracts involving co-signers Promises made in consideration of marriage Contracts for the sale of goods priced >$500

Exceptions to the Statute of Frauds

Exceptions are made in certain circumstances such as: Partial Performance Admission Promissory Estoppel

Admission

If a party whom enforcement of an oral contract is sought "admits" in pleadings, testimony, or in court that the contract was made, the contract is enforceable

Collateral Promises

Made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform. Must be in writing to be enforceable.

Promises Made in Consideration of Marriage

Must be in writing. Applies to the prenuptial agreement as well.

Exceptions to Statute of Fraud

Partial performance, admissions, promissory estoppel, special exceptions under the UCC

Primary vs Secondary Obligations

Primary (1 on 1) contracts does NOT have to be in writing. Contracts that involve co-signers is required to be in writing.

Partial Performance

When partial performance has taken place, courts will rule if Statute of Fraud will stand. Normally determined by the degree of harm (mere reliance on certain types of oral contracts is sometimes enough to remove them from Statute of Fraud). Or if buyer accepts delivery of goods and seller accepts payment, then the court will rule that contract is enforceable.

Integrated Contracts

Written contracts that are intended to be the complete and final presentations of the parties' agreement, thus precluding the admissibility of parol evidence other than in the exceptions listed.

Parol Evidence Rule

a rule that oral evidence cannot be used to contradict the terms of a written contract

Written memorandum

written or electronic evidence of the oral contract