BSL_15

10/22/2008 11:43:00 AM

Statute of Frauds (S.o.F.) y Purpose is to minimize the potential for fraud that exists when there is not written contract, basically says that there are certain kinds of contracts that are only enforceable if evidenced by writing; it is a defense in a breach of contract case y Only applies to executory contracts y Contracts that are covered by the Statute of Frauds o Suretyship provision covers Collateral Contracts- one party agrees to pay a debt that a second party owes to a third party if the second party fails to pay.  Exception- Main Purpose Rule If the main purpose of the guarantors promise was for a personal benefit, it is not covered by the statute of frauds y Ex. A went with B to the bank for A to take out a loan and B agreed to Suretyship only because A owed B money. o Land contract provision covers contracts to buy or sell real estate  Exceptions Sellers full performance (transferring ownership via a deed) y takes contract out of protection from statute of fraud, is enforceable without being in writing OR Buyers full/partial performance and action in clear reliance y Took possession y OR made substantial improvements o Marriage Provision covers prenuptial agreements o One year provision covers contracts that cannot be performed within one year of formation  Once one party has fully performed the agreement is no longer covered by the statute of frauds Ex. Taylor will mow lawn every week for year and a half, will be paid half up from, half at end.  Possibility test If it is at all possible that this agreement could have been performed within a year, it is not covered under the statute of frauds Contracts for an indefinite period of time arent covered (doesnt have to be in writing)  Computation of Time Focus on the time between the day the verbal agreement was entered into and the day that agreement will be performed y Ex. Enter into a verbal agreement on 1/1/08 for J to work for KT for 6 months beginning 10/1/08. Since the action will be COMPLETED 4/1/09, that is more than a

year and it is covered under the statute of frauds (must be in writing) o Contracts for the Sale of goods $500 or more are covered y Compliance with the Statute of Frauds o Writing requirements  Written memorandum (all except Contracts for the sale of goods) Indicates an agreement was made either explicitly or implicitly AND contain material terms of the agreement y Parties, subject matter, consideration, quantity for goods AND must be signed by party against whom the agreement is being enforced  Combination of documents is permitted if they clearly relate to eachother and the same deal o Additional Ways of Satisfying statute of frauds under the UCC  Confirmatory memorandum between Merchants- within reasonable time after verbal agreement, I merchant sends qualifying memo to the other who does not object within 10 days Verbal agreement enforceable against the recipient  Specially manufactured goods Are being manufactured for a particular buyer, and are not suitable for sale in the ordinary course of business Verbal contract becomes enforceable once the seller has made a substantial beginning in producing the goods  Admission in Court Parol evidence rule y Parol Evidence- Prior or contemporaneous statements not contained in a written contract y Parol Evidence Rule- Parol evidence is not admissible to add to, alter, or contradict the terms of a written contract that qualifies as an integration o (An integration is a written contract intended as a full and final statement of the parties agreement) o Integration/Merger clause (says this written contract is final) o OR highly detailed y Conditions to which PER does not apply o Subsequent statements o No integration o Ambiguity (term that subject to more than one reasonable interpretation) will allow evidence to clarify term o Clerical error/typo o To establish a defense

Kalas v. Cook y Kalas printed materials for Cook and stored them until delivery was necessary. When Kalas closed her business, and Cook died before delivery and payment of last shipment. Plaintiff sued for unpaid deliveries. Defendant raised defense under statute of frauds. Court ruled that as a contract for the sale of goods, its enforcement was not precluded by the UCC statute of frauds provision. The court judged in favor of plaintiff, appeal court affirmed judgment. Estate of Jackson V. Devenyns y Jackson and Devenyns had agreement to sell a 79 acre property owned by Jackson, Jackson wished to reserve a 1.3 acre portion of the parcel. Agreement contained a drawing and dimensions, but not a description of the parcel. Jackson died and his estate refused to honor agreement. Deveyns filed a petition to order a conveyance. Based on parole evidence rule, the estate of Jackson objected to the admission of the witnesses testimony that they could point out the specific area based on conversations with Jackson. The court heard testimony and determined a sufficient description could be determined, and it was granted. Judgment was reversed in appeal court. Because it did not comply with the requirements of statute of frauds. Jenkins v Eckerd Corp. y The parole evidence rule encourages parties to embody their complete agreement in an integrated written contract and fosters reliance upon the written contract.

10/22/2008 11:43:00 AM

10/22/2008 11:43:00 AM