Statute of Frauds World (PDF)

"**STATUTE OF FRAUDS" WORLD** **WHAT "SATISFIES" (i.e., complies with) THE STATUTE OF FRAUDS:** The Statute of Frauds requires that a contract be in writing and meet the following requirements to be considered valid: - **Writing** The contract must be in writing, and any type of writing is acc...

"**STATUTE OF FRAUDS" WORLD** **WHAT "SATISFIES" (i.e., complies with) THE STATUTE OF FRAUDS:** The Statute of Frauds requires that a contract be in writing and meet the following requirements to be considered valid: - **Writing** The contract must be in writing, and any type of writing is acceptable. The writing can be made up of multiple documents, as long as they are related to each other and refer to the same subject matter. **Class: per the Crabtree v. Elizabeth Arden, Inc. case: it can be a compilation of documents, created before or after the allege oral contract arose. The documents must contain essential terms. There must be evidence tht the documents are connected/related to one another. At least one of the document must be signed by the party against who enforcement is sought. As to unsigned documents, there must be evidence of "assent" to the terms of the unsigned writing. Such documents and behavior/actions can constitute SATISFACTION of the requirement imposed by the Statute of Frauds.** - **Signature** The contract must be signed by at least one party, but often both parties are required to sign. The party who signs the contract is the party who is liable for it. **Class: See above.** - **Essential terms** The writing must include the essential terms of the contract, such as the parties involved, the subject matter, and the terms and conditions. - **Intent** The writing must show that the parties intended to enter into a contract **STATUTE OF FRAUDS: IN GENERAL** 1. **A "defense" to a claim that there is a contract. It is an assetiong there is no contract for what the plaintiff claims.** 2. **Intended to prevent a "risk of fraud." Does not require a showing of fraud.** 3. **Courts have, over time, become somewhat "hostile" to the Statute of Frauds\-\--hence the exceptions to it.** 4. **KEY QUESTIONS IN A "STATUTE OF FRAUDS" ANALYSIS** 1. **Is the contract WITHIN the Statute of Frauds (i.e. a contract that the Statute of Frauds requires to be in writing and signed by the person against whom enforcement is sought?)** 2. **If yes, is there a written document or document that SATISFIES the Statute of Frauds. (i.e., see Crabtree v. Elizabeth Arden)** 3. **If not, do the facts warrant an EXCEPTION to the Statute of Frauds:** **Class: Beaver v. Brumlow: This is the PERFORMANCE EXCEPTION: past performance along with an oral agreement must unequivocally show the existence of a contract. This is known as the "unequivocally referable" TEST. Courts have backed off a rigid enforcement of that test by allowing some ambiguity and asking "would an outsider naturally and probably conclude a contract exits"?** **Class: Alaska Democratic Party v. Rice: This is the PROMISSORY ESTOPPEL EXCEPTION. (NOTE: both the promissory estoppel exception and the performance exception require "reasonable reliance" by the party seeking enforcement.** **Class: ADMISSION EXCEPTION \-\-\--of the existence of a contract. The defendant admitted that in the Jannusch v. Naffziger (sale of the pizza truck case.** **IS THAT STATUTE OF FRAUDS A COMMON LAW AND/OR STATUTORY CONCEPT** It can be both. It is a common law concept. But some states have codified it / adopted it by statute. The UCC codifies a form of the Statute of Frauds in UCC 2-201. **Key points about the Statute of Frauds: ** - Purpose: To prevent fraud by requiring certain types of contracts to be in writing and signed by the parties involved.  - Categories of contracts covered: Contracts related to land, contracts that cannot be completed within one year, contracts for the sale of goods over a certain value, contracts in consideration of marriage, and contracts of suretyship.  - Writing requirements: The writing does not need to be a formal contract, but it should include the essential terms of the agreement and be signed by the party against whom enforcement is sought. **LIST OF CONTRACTS (FOR OUR CLASS) THAT YOU MUST KNOW---MUST BE IN WRITING** The Statute of Frauds requires certain contracts to be in writing, including:  - Marriage: Any promises made in connection with marriage, such as an engagement ring  - One-year: Contracts that , BY THEIR TERMS, are impossible to perform, and cannot be performed, within one year of the inception of the alleged contract.  - Land: Contracts for the sale of land, including easements and options to purchase land  - Executor: Promises by an executor or administrator of an estate to pay a debt from their own funds  - Goods: Contracts for the sale of goods worth more than a specific dollar amount, typically \$500 or more. - Suretyship: Contracts in which one person promises to pay the debt of another  Some states have additional requirements, such as requiring life insurance contracts and trust agreements to be in writing **EXCEPTIONS TO THE STATUTE OF FRAUDS** There are several exceptions to the Statute of Frauds, including:  - Partial performance If one party has already partially fulfilled their obligations under the contract, the court may enforce it.  - Promissory estoppel This legal principle allows an injured party to enforce a verbal contract if they can prove they relied on the other party\'s promise to their detriment.  - Admission If the party against whom enforcement is sought admits in court that a contract was made, it can be an exception.  - Specially manufactured goods If a seller has made a substantial beginning to manufacture custom goods, an oral contract might be enforced.  - Payment If payment has already been made and received by the seller, they are obligated to furnish the agreed terms to the buyer.  An exception to the statute of fraud writing requirement exists, however when the goods have been delivered by the seller and received and accepted by the buyer. Also when the buyer makes payment in full. - Possibility test If there is even the slightest chance of carrying out the agreement completely within one year, an oral contract is enforceable.  The Statute of Frauds was intended to prevent witnesses from committing perjury by creating contracts where none existed AND these exceptions are allowed because if present, they give the court a sufficient basis to believe there is an enforceable contract between the parties. WHEN IS A MEMORDUM(S) SUFFICIENT TO SATISY THE REQUIREMENT OF THE STATUTE OF FRAUDS A memorandum is sufficient to satisfy the Statute of Frauds when it: - Contains the contract\'s essential terms The memorandum must include the important terms and conditions of the agreement. - Identifies the parties The memorandum must identify the contracting parties. - Demonstrates intent The memorandum must provide enough information to show the parties\' intent to enter into a contract. - Is signed The party against whom the contract is to be enforced must sign the memorandum.  The memorandum can be created before or after the contract is formed. It doesn\'t need to have been created with the intention of being binding. In fact, in some cases, written offers that were accepted orally have been considered sufficient.  The Statute of Frauds applies to certain types of contracts, such as those that involve the sale or transfer of land, or those that can\'t be completed within one year.  If it can be distinctly ascertained from the written communications without the aid of oral evidence what are the terms of the contract, the memorandum will be-suffic- ient to satisfy the statute. MULTIPLE MEMORANDA SUFFICIENTLY CONNECTED CAN SATISFY THE STATUTE OF FRAUDS Multiple writings can satisfy the Statute of Frauds if they are connected and contain the essential elements of the agreement. The writing does not need to be a formal contract, and can be a letter, receipt, or telegram. Still must be signed. SIGNING REQUIREMENT OF MEMORAND IN ORDER TO SATSIFY THE STATUTE OF FRAUDS To satisfy the Statute of Frauds, a memorandum must be signed by the party to be charged. This means that the signature can appear anywhere on the document, and can be any writing, mark, initials, stamp, engraving, or other symbol that the party to be charged intended to authenticate the writing. PROMISSORY ESTOPPEL AS AN EXCEPTION TO THE STATUTE OF FRAUDS Promissory estoppel is an exception to the Statute of Frauds. Promissory estoppel is a legal doctrine that can be used to enforce an oral contract when it would be unjust to release one party from the agreement. It\'s often used in contracts that involve the sale of land, contracts that can\'t be completed within a year, or contracts that involve a promise to act as a guarantor.  Promissory estoppel is based on the idea that a promise enforced through promissory estoppel isn\'t a \"contractual\" obligation, so the Statute of Frauds doesn\'t apply.  Promissory estoppel is based on the following criteria: - The party relied on the oral contract - The other party could have reasonably foreseen that the first party would rely on the oral contract - Enforcing the contract is the only way to avoid an injustice - AN ORAL AGREEMENT WITH PARTIAL PREFORMANCE CAN BE AN EXCEPTION TO THE STATUTE OF FRAUDS. An oral agreement can be considered an exception to the Statute of Frauds in certain situations, particularly when there is substantial part performance, reliance on the oral agreement, or when the contract falls under a specific exception based on the type of agreement and jurisdiction; meaning that even though a contract is not written, it can still be enforceable under certain circumstances. PARTIAL PERFORMANCE OF AN "ORAL" REAL ESTATE CONTRACT (AND SOME OTHER CONTRACTS) CAN BE A KEY FACTOR TO AVOID APPLICATION OF THE STATUTE OF FRAUDS  Partial performance can be an exception to the Statute of Frauds, particularly in real estate transactions. The part performance doctrine allows a court to enforce an oral contract for the sale of land when one party has partially performed their obligations. Partial performance needs to combine with an oral agreement with sufficient terms. IF PRICE IS MISSING IN AN AGREEMENT\-\--CAN THE AGREEMENT STILL SATISFY THE STATUTE OF FRAUDS AND /OR THE EXISTENCE OF AN ENFORCEABLE CONTRACT A contract can generally satisfy the Statute of Frauds even if it does not explicitly state the price, as long as the other essential terms of the agreement are clearly outlined in the writing and a reasonable method for determining the price can be inferred from the contract; this is especially true under the Uniform Commercial Code (UCC) when dealing with contracts for the sale of goods.  Key points to remember:  - Essential terms: The writing must still include the key elements of the contract, such as the parties involved, the subject matter, and the quantity of goods (if applicable).  - Implied price determination: Even if the exact price is not stated, the contract can still be enforceable if it provides a mechanism to determine the price, like referencing a market rate or a specific calculation method.  - UCC flexibility: Under the UCC, the requirement for a price in a written contract is less strict, allowing for contracts to be enforceable even if the price is not explicitly stated, as long as other essential terms are present.  Example:  - A contract to purchase a specific car from a dealer might not state the exact price, but if it specifies the car model and year, the price could be reasonably determined by referring to the dealer\'s current price list, satisfying the Statute of Frauds.  Important considerations:  - Context matters: While a missing price may not always be fatal, it is always best practice to include a price or a clear method for determining the price in a written contract to avoid potential disputes. . --------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- When it applies When one party has partially performed an oral contract for the sale of land How to invoke The party must show that they acted in reliance on the oral agreement, and that their actions are clear, certain, and definite Examples of actions Full or partial payment, taking possession of the property, or making valuable improvements to the property Why it applies It prevents a seller from using the Statute of Frauds to avoid an oral agreement, and it\'s based on the principle that it would be unfair to allow one party to back out after the other has partially performed --------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- THE" PAST PERFORMANCE DOCTRINE" MAY SASTIFY THE SATUTE OF FRAUDS. The past performance doctrine is a legal concept that has multiple applications, including as an exception to the Statute of Frauds and in the United States Court of Federal Claims:  - Statute of Frauds The past performance doctrine is an exception to the Statute of Frauds requirement that certain contracts be in writing to be enforceable. For example, if a buyer takes possession of land and makes improvements to it, courts may consider the oral contract to be enforceable, even if it doesn\'t meet the Statute of Frauds requirements.  STATUTE OF FRAUDS \-\-\--CODIFIED BY THE UCC 1. [Uniform Commercial Code](https://www.law.cornell.edu/ucc) **§ 2-201. Formal Requirements; Statute of Frauds.** § 2-201. Formal Requirements; Statute of Frauds. \(1) Except as otherwise provided in this section \--a [contract](https://www.law.cornell.edu/ucc/2/2-106#contract_2-106) for the [sale](https://www.law.cornell.edu/ucc/2/2-106#sale_2-106) of [goods](https://www.law.cornell.edu/ucc/2/2-105#Goods_2-105) for the price of \$500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a [contract for sale](https://www.law.cornell.edu/ucc/2/2-106#Contract%20for%20sale_2-106) has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of [goods](https://www.law.cornell.edu/ucc/2/2-105#Goods_2-105) shown in such writing. (2) [Between merchants](https://www.law.cornell.edu/ucc/2/2-104#Between%20Merchants_2-104)\-- if within a reasonable time a writing in confirmation of the [contract](https://www.law.cornell.edu/ucc/2/2-106#contract_2-106) and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received. (3) A [contract](https://www.law.cornell.edu/ucc/2/2-106#contract_2-106) which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable - \(a) if the [goods](https://www.law.cornell.edu/ucc/2/2-105#Goods_2-105) are to be specially manufactured for the [buyer](https://www.law.cornell.edu/ucc/2/2-103#Buyer_2-103) and are not suitable for [sale](https://www.law.cornell.edu/ucc/2/2-106#sale_2-106) to others in the ordinary course of the [seller\'s](https://www.law.cornell.edu/ucc/2/2-103#Seller_2-103) business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or - \(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a [contract for sale](https://www.law.cornell.edu/ucc/2/2-106#Contract%20for%20sale_2-106) was made, but the [contract](https://www.law.cornell.edu/ucc/2/2-106#contract_2-106) is not enforceable under this provision beyond the quantity of [goods](https://www.law.cornell.edu/ucc/2/2-105#Goods_2-105) admitted; or - \(c) with respect to [goods](https://www.law.cornell.edu/ucc/2/2-105#Goods_2-105) for which payment has been made and accepted or which have been received and accepted (Sec. [2-606](https://www.law.cornell.edu/ucc/2/2-606.html)). IS TH UCC SECTION 2-201 LIMITATION OF THE "QUANTITY OF GOODS" SHOWN OR AMDITTED---A PROVISION THAT IS STRICTLY ENFORCED/FOLLOWED. Under UCC 2-201, the quantity of goods specified/specified\-\-- is the only term that absolutely needs to be in writing to satisfy the Statute of Frauds, meaning that a contract for the sale of goods is not enforceable beyond the quantity stated in the writing, essentially preventing one party from being obligated to a larger quantity than what is explicitly documented; this ensures clarity and protects parties from potential misunderstandings regarding the exact amount of goods involved in a sale. AS BETWEEN MERCHANTS THE "WRITING" NEED "NOT" BE SIGNED. Under UCC 2-201, when dealing with contracts between merchants, a writing confirming the contract does not necessarily need to be signed by the party against whom enforcement is sought; instead, the sending merchant can satisfy the Statute of Frauds if the receiving merchant fails to object to the written confirmation within ten days of receiving it