Contracts statute of frauds

1. 1
Contracts Statute of
Frauds

2. 2
§1: Origins of the
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.

3. 3
§2: The 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.

4. 4
Contracts Involving
Interests in Land
 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).

5. 5
The One-Year Rule
 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.

6. 6
Collateral Promises
 Primary v. Secondary Obligations.
 “Main Purpose Rule” Exception .
 Estate Debts.

7. 7
Promises Made in
Consideration of Marriage
 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.

8. 8
Contracts for the Sale of Goods
 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.

9. 9
§3: Sufficiency of the Writing
 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).

10. 10
§4: Parol Evidence Rule
 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.

11. 11
Exceptions to
the Parol Evidence Rule
 Contracts subsequently modified.
 Voidable or Void contracts.
 Contracts containing ambiguous terms.
 Prior dealing, course of performance, or
usage of trade.

12. 12
Exceptions to
the Parol Evidence Rule [2]
 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).