V. B. Types of Contracts Within the Statute of Frauds

b. Exceptions—writing not required

1) Specially manufactured goods No writing is required if (i) the goods are to be specially manufactured for the buyer, (ii) the goods are not suitable for sale to others, and (iii) the seller has made "either a substantial beginning of their manufacture or commitments for their procurement." UCC § 2-201. 2) Part payment When part of the purchase price for a single item has been paid, the contract is enforced and the partial payment falls outside the UCC Statute of Frauds only to the extent of the purchase. 3) Receipt and acceptance The contract is outside the UCC Statute of Frauds to the extent that goods are received and accepted. 4) Judicial admission If the party to be charged admits in pleadings, testimony, or otherwise in court that a contract was made, then the contract is enforceable only to the extent of the quantity admitted. 5) Failure to respond to a memorandum (when both parties are merchants) If both parties are merchants and a memorandum sufficient against one party is sent to the other party, who has reason to know its contents, and the receiving party does not object in writing within 10 days, then the contract is enforceable against the receiving party even though he has not signed it.

1. Marriage Provision

Any agreement in consideration of marriage is within the Statute of Frauds, except the promises by each to marry the other (i.e., the marriage contract itself). A prenuptial agreement is the paradigm of an agreement made in consideration of marriage that is subject to the Statute of Frauds. A promise made in consideration of marriage does not become enforceable merely because the marriage has taken place in reliance on it. However, additional part performance or action in reliance may make such a promise enforceable. Restatement (Second) of Contracts § 124.

4. One-Year Provision

Contracts that cannot be performed within one year because of the constraints of the terms of the agreement must be in writing. The year starts the day after the contract is made. It is the time that the contract is made that is important, not the length of performance. The fact that a contract is not completed within one year does not mean that it is voidable under the Statute of Frauds. For the Statute to apply, the actual terms of the contract must make it impossible for performance to be completed within one year. Full performance by either party to the contract will generally take the contract out of the Statute of Frauds. Although part performance would not take the contract out of the Statute of Frauds, restitution would be available to the party who performed.

B. Types of Contracts Within the Statute of Frauds

Most states require that the following five categories of contracts be evidenced by a writing: Marriage - A contract made upon consideration of marriage; Suretyship - A contract to answer for the debt or duty of another; One year - A contract that cannot be performed within one year from its making; UCC - Under the UCC, a contract for the sale of goods for a price of $500 or more; and Real property contract - A contract for the sale of an interest in real property. 1. Marriage Provision 2. Suretyship Provision

c. Modifications

Under UCC § 2-209(3), the requirements of the Statute of Frauds must be satisfied if the contract as modified is within its provisions. Any of the above exceptions would apply, though, to take a modification out of the Statute of Frauds. The UCC would also enforce a provision in a contract for the sale of goods that required a modification to be in writing. Thus, even if the contract was for a sale of goods valued at less than $500 or involved one of the exceptions discussed above, if the contract specifically provided that any modification be in writing, then the UCC would enforce that requirement. See UCC § 2-209(2). Note that under a common-law contract, a provision requiring a modification to be in writing even though the modification would not otherwise fall within the Statute of Frauds would not be enforceable.

a. Sufficiency of the writing

When the price of goods is at least $500, the UCC requires a memorandum of the sale that must: i) Indicate that a contract has been made; ii) Identify the parties; iii) Contain a quantity term; and iv) Be signed by the party to be charged. The memorandum needs to be signed only by the party disputing the existence of the contract; it is not necessary for the enforcing party to have signed the writing. 1) Type of writing required To satisfy the Statute of Frauds, the above terms must be in writing, but that writing need not be an actual contract. It does not even need to be contained on one piece of paper—a series of correspondence between the parties may suffice. 2) Mistake in writing A mistake in the memorandum or the omission of other terms does not destroy the memorandum's validity. An omitted term can be proved by parol evidence. However, enforcement is limited to the quantity term actually stated in the memorandum.

2. Suretyship Provision

a. Rule Suretyship is a three-party contract, wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt of a third party (the principal) resulting from the principal's failure to pay as agreed. A suretyship induces the second party to extend credit to the third party. A promise to answer for the debt of another must generally be in writing to be enforceable. Note: A contract of an executor (or administrator) of an estate may fall into this category insofar as the executor promises the creditor of the decedent that if the estate does not have the funds to pay the debt, he will assume personal liability for that debt. The statute applies only to debts incurred by the decedent, not to new debts incurred by the estate after his death. Because the executor undertakes to answer for the debt of the decedent, such contracts fall under the suretyship provision. b. Exceptions 1) Indemnity contracts An indemnity contract (i.e., a promise to reimburse for monetary loss) does not fall within the Statute of Frauds as a suretyship provision. 2) Main-purpose exception If the main purpose of the surety in agreeing to pay the debt of the principal is the surety's own economic advantage, rather than the principal's benefit, then the contract does not fall within the Statute of Frauds, and an oral promise by the surety is enforceable.

5. Sale of Goods for $500 or More

a. Sufficiency of the writing b. Exceptions—writing not required c. Modifications

3. Real Property Contracts

a. Types A promise to transfer or receive any interest in real property is within the Statute of Frauds. The Statute does not apply to the conveyance itself (which is governed by a separate statute), but it does apply to a contract providing for the subsequent conveyance of an interest in real property. The Statute of Frauds also applies to a promise to create an interest in real property, the assignment of a right to purchase real property, an option contract for the sale of an interest in real property, and a promise to give a mortgage or other lien as security. Although leases and easements, as property interests, are generally subject to the Statute of Frauds, a lease or easement for one year or less is usually not covered by the Statute. In addition, licenses and assignments of mortgages are typically not within the Statute. b. Part performance Even if an oral contract for the transfer of an interest in real property is not enforceable at the time it is made, subsequent acts by either party that show the existence of the contract may make it enforceable, even without a memorandum. Such acts include: i) Payment of all or part of the purchase price; ii) Possession by the purchaser; or iii) Substantial improvement of the property by the purchaser. Most jurisdictions require at least two of the above three acts to establish sufficient part performance.