Chapter 14 Contracts: Statute of Frauds - PowerPoint PPT Presentation

Contracts: Statute of Frauds

• 1677 England passed the law “An Act for the Prevention of Frauds and Abuses.”
• Certain types of contracts must be in writing and signed by the party against whom enforcement is sought to be enforceable.
• Today, almost every state has a Statute of Frauds.

• To be enforceable, the following types of contracts must be in writing and signed:
• Contracts involving interest in land.
• Contracts involving “One-Year Rule.”
• Collateral or Secondary Contracts.
• Promise made in consideration of marriage.
• Contracts for the sale of goods priced at $500 or more.

• Land includes all physical objects that are permanently attached to the soil: buildings, fences, trees, and the soil itself.
• All contracts for the transfer of other interest in land: mortgages and leases.
• Case 14.1:Michel v. Bush (2001).

• A contract that cannot, by its own terms, be performed within one year from the date it was formed must be in writing to be enforceable.
• One-year period begins to run the day after the contract is made.
• Test: Whether performance is possible (although unlikely) within one year.

• Primary v. Secondary Obligations.
• “Main Purpose Rule” Exception .
• Estate Debts.

• Prenuptial agreements must be in writing and signed to be enforceable.
• Contracts must be supported by some consideration to be enforceable.
• Prenuptial agreements may not be enforceable if the agreement is not voluntary.

• UCC requires a writing or memorandum for the sale of goods priced at $500 or more. Exceptions:
• Partial Performance.
• Case 14.2:Spears v. Warr (2002).
• Admissions.
• Promissory Estoppel.
• Special Exceptions under the UCC.

• Under the Statue of Frauds.
• Must name, identify subject matter, consideration, other essential terms, and must be signed by the the party against whom enforcement is sought.
• Under the UCC.
• Need only name the quantity term and be signed by the party to be charged.
• Case 14.3:Interstate Litho Corp. v. Brown (2001).

• Oral representations or promises made prior to the contract’s formation or at the time the contract was created, may not be admitted in court.
• Integrated Contracts.

• Contracts subsequently modified.
• Voidable or Void contracts.
• Contracts containing ambiguous terms.
• Prior dealing, course of performance, or usage of trade.

• Contracts subject to orally agreed-on conditions.
• Contracts with an obvious or gross clerical error that clearly would not represent the agreement of the parties.
• Case 14.4: Cousins Sub Systems v. McKinney (1999).

• UCC 2-201 on the Statute of Frauds.
• Case Involving Emails and the Statute of Frauds.
• History of The Statute of Frauds .
• Legal Research Exercises on the Web.