BAR FLASHCARDS - C4 Defenses

Question 1

REQUIREMENT THAT NO DEFENSES EXIST

Answer 1

Even if an agreement is supported by valuable consideration or a recognized substitute, contract rights may still be unenforceable because there is a defect in capacity (making the obligations voidable by one of the parties), because there is a defense to forma- tion of the contract, or because a defense to enforcement of certain terms exists.

Question 2

Defenses

Answer 2

(1) lack of capacity
(2) ambiguity/misunderstanding
(3) Mistake
(4) Unconscionability
(5) duress

Question 3

Lack of Capacity

Answer 3

(1) minors
(2) intoxicated
(3) mentally incompetent
General Rule: an incapacitated defendant has the right to disaffirm the K (she does not have to disaffirm, but she can if she wants to avoid the K); minor can enforce the agreement against you (i.e. choose not to disaffirm if they want to)

Question 4

Contracts of Infants (Minors)

Answer 4

Infants (in most jurisdictions, anyone under the age of 18) generally lack capacity to enter into a contract binding on themselves. But, contractual promises of an adult made to an infant are binding on the adult.
It doesnt matter if adult thought minor was 18.

Question 5

Disaffirmance

Answer 5

Minor does not have to dissafirm, they can still enforce the K!!!!
An infant (minor) may choose to disaffirm a contract any time before (or shortly after) reaching the age of majority. The contract must be disaffirmed as a whole; it can’t be affirmed in part and disaffirmed in part. If an infant chooses to disaf- firm, they must return anything that they received under the contract that still remains at the time of disaffirmance. However, there is no obligation to return any part of the consideration that has been squandered, wasted, or negli- gently destroyed.

Question 6

Implied Affirmation After Gaining Capacity

Answer 6

look for a minor retaining the benefit under the K after reaching 18
- minor only gets a reasonable time to disaffirm, therefore if still using car, can make them pay for it after turning 18

Question 7

Affirmance upon Attaining Majority

Answer 7

An minor may affirm, that is, choose to be bound by the contract in whole, upon reaching majority. A minor affirms either expressly or by conduct, such as by failing to disaffirm the contract within a reasonable time after reaching majority.

Question 8

Retaining benefits after gaining capacity=

Answer 8

Implied affirmation

Question 9

Exceptions to Incapacity Defense

Answer 9

An incapacitated party is liable for necessaries (i.e. food, shelter, clothing, or medical care) but only for their reasonable value, not the K price. This is nopt a contract obligation, just an obligation to pay reasonable value in restitution.

Question 10

Necessaries

Answer 10

“Necessaries” are items necessary for subsistence, health, or education (including food, shelter, clothing, and medical care). A minor may disaffirm a contract for necessaries but will be liable in restitution for the value of benefits received.

Question 11

Mental Incapacity

Answer 11

One whose mental capacity is so deficient that they are incapable of understanding the nature and significance of a contract may disaffirm when lucid or by a later appointed legal representative. They may likewise affirm during a lucid interval or upon complete recovery, even without formal restoration by judicial action. In other words, the contract is voidable. Like minors, mentally incom- petent persons are liable in quasi-contract for necessaries. Note that a mentally incompetent person has no ability to contract once a guardian has been appointed. Any attempted contracts by an incapacitated person who is under a guardianship are void.

Question 12

Intoxicated Persons

Answer 12

One who is so intoxicated that they don’t understand the nature and significance of their promise may be held to have made only a voidable promise if the other party had reason to know of the intoxi- cation. The intoxicated person may affirm the contract upon recovery. Once again, there may be quasi-contractual recovery for necessaries furnished during the period of incapacity.

Question 13

Defense: Absence of Mutual Assent

Answer 13

• Misunderstanding—Ambiguous Contract Language
• ## Mutual Mistake as to Existing Facts

Question 14

ambiguity/misunderstanding: Misunderstanding—Ambiguous Contract Language

Answer 14

If the contract includes a term with at least two possible meanings, the result depends on the parties’ awareness of the ambiguity:
a. Neither party aware—no contract unless both parties intended the same meaning;
b. Both parties aware—no contract unless both parties intended the same meaning; or
c. One party aware—binding contract based on what the ignorant party reasonably believed to be the meaning of ambiguous words.
Ambiguity is one area where subjective intent is taken into account.

Question 15

If the contract includes a term with at least two possible meanings, the result depends on the parties’ awareness of the ambiguity:

Answer 15

a. Neither party aware—no contract unless both parties intended the same meaning;
b. Both parties aware—no contract unless both parties intended the same meaning; or
c. One party aware—binding contract based on what the ignorant party reasonably believed to be the meaning of ambiguous words.

Question 16

Ambiguity is one area where ___ is taken into account.

Answer 16

Ambiguity is one area where subjective intent is taken into account.

Question 17

ambiguity/misunderstanding: B and S K for the delivery of cotton on the ship “peerless” B means the ship sailing in Oct S means the ship sailing in Dec. is there a K?

Answer 17

No, therefore no remedy for either party
there was no meeting of the minds
If tell you in fact pattern that one of the parties knew or should have known about the two ships named peerless then enforce against that party.

Question 18

Mutual Mistake as to Existing Facts

Answer 18

If both parties entering into a contract are mistaken about existing facts (not future happenings) relating to the agreement, the contract may be voidable by the adversely affected party if:
(i) The mistake concerns a basic assumption on which the contract is made (for example, the parties think they are contracting for the sale of a diamond but in reality the stone is a cubic zirconia);
(ii) The mistake has a material effect on the agreed-upon exchange (for example, the cubic zirconia is worth only a hundredth of what a diamond is worth); AND
(iii) The party seeking avoidance did not assume the risk of the mistake.

Question 19

Mutual mistake: If both parties entering into a contract are mistaken about existing facts (not future happenings) relating to the agreement, the contract may be voidable by the adversely affected party if:

Answer 19

If both parties entering into a contract are mistaken about existing facts (not future happenings) relating to the agreement, the contract may be voidable by the adversely affected party if:
(i) The mistake concerns (the SUBJECT MATTER) a basic assumption on which the contract is made (for example, the parties think they are contracting for the sale of a diamond but in reality the stone is a cubic zirconia); AND
(ii) The mistake has a material effect on the agreed-upon exchange (for example, the cubic zirconia is worth only a hundredth of what a diamond is worth); AND
(iii) The party seeking avoidance did not assume the risk of the mistake.

Question 20

Mistake (mutual)

Answer 20

Mutual Mistake about a material fact: bargaining over a cow that they thought was barren
- mutual mistake over existence of subject matter; no K, grant relief, do not have to pay for something that is no longer in existence
- if something doesn’t exist or its a fake or something then not enforceable
- if just paid more than what it was worth, still enforceable, mistake as to value not material therefore still enforceable

Question 21

No K if mutual mistake is about…

Answer 21

Mutual mistake about the existence of the subject matter. Fundamental mistake that has a material effect on the bargain.

Question 22

Not a Defense If Party Bore the Risk

Answer 22

Mutual mistake is not a defense if the party asserting mistake as a defense bore the risk that the assumption was mistaken.
This commonly occurs when one party is in a position to better know the risks than the other party (for example, contractor vs. homeowner) or where the parties knew that their assumption was doubtful (that is, when the parties were consciously aware of their ignorance).

Question 23

Mistake in Value Generally Not a Defense

Answer 23

If the parties to a contract make assumptions as to the value of the subject matter, mistakes in those assumptions will gener- ally not be remedied—even though the value of the subject matter is generally a basic assumption and the mistake creates a material imbalance—because both parties usually assume the risk that their assumption as to value is wrong.

Question 24

Mistake in value, enforceable K?

Answer 24

Yes, not material.

Question 25

Unilateral Mistake

Answer 25

If only one of the parties is mistaken about facts relating to the agreement, the mistake will not prevent formation of a contract. But, if the nonmistaken party knew or had reason to know of the mistake made by the other party, the contract is voidable by the mistaken party. As with mutual mistake, the mistake must have a material effect on the agreed-upon exchange, and the mistaken party must not have borne the risk of the mistake. Look for ASSUMPTION OF RISK.

Question 26

Mistake unilateral - when is it a defense?

Answer 26

not going to grant a defense; unless the other party knew or should have known that injured party was mistaken/misunderstanding. NO relief UNLESS obvious mistake or actually knew.

Question 27

mechanical error in computation - unilateral mistake?

Answer 27

Unilateral mistakes arise most commonly when one party makes a mechanical error in computation. Whenever you see facts in which a subcontractor’s bid was wrong or acreage in a land sale contract was miscalculated, consider whether the contract may be avoided due to unilateral mistake. GRANT RELIEF for unilateral mistake.

Question 28

Mistake by the Intermediary (Transmission)

Answer 28

When there is a mistake in the transmission of an offer or accep- tance by an intermediary, the prevailing view is that the message as transmitted is operative unless the other party knew or should have known of the mistake.

Question 29

Misrepresentation

Answer 29

- Fraudulent Misrepresentation (Fraud in the Inducement) - Material Misrepresentation

Question 30

Fraudulent Misrepresentation (Fraud in the Inducement)

Answer 30

If a party induces another to enter into a contract by using fraudu- lent misrepresentation (that is, by asserting information they know is untrue), the contract is voidable by the innocent party if they justifi- ably relied on the fraudulent misrepresentation. This is fraud in the inducement.

Question 31

Material Misrepresentation

Answer 31

Whether or not a misrepresentation is fraudulent, the contract is voidable by the innocent party if the innocent party justifiably relied on the misrepresentation and the misrepresentation was material. A misrepresentation is material if: (1) it would induce a reasonable person to agree, or (2) the maker knows that for some special reason it is likely to induce the particular person to agree, even if a reason- able person would not.

Question 32

A misrepresentation is material if: (2)

Answer 32

A misrepresentation is material if: (1) it would induce a reasonable person to agree, or (2) the maker knows that for some special reason it is likely to induce the particular person to agree, even if a reason- able person would not.

Question 33

a fraudulent misrepresentation need not be ___; it can be ___

Answer 33

a fraudulent misrepresentation need not be spoken or written; it can be inferred from conduct. Concealing a fact, frustrating investigation of a fact, or falsely denying knowledge of a fact is the same as asserting the fact does not exist. However, nondisclosure of a fact is not misrepresen- tation unless it is material or fraudulent (for example, false denial of knowledge of a material fact).

Question 34

nondisclosure of a fact - misrepresentation???

Answer 34

nondisclosure of a fact is not misrepresen- tation unless it is material or fraudulent (for example, false denial of knowledge of a material fact).

Question 35

Justified Reliance

Answer 35

A party is not entitled to relief if the reliance was unreasonable under the circumstances. However, just because a misrepresentation could have been revealed by the exercise of reasonable care does not mean that reliance was unjustified. Failure to read a contract or use care in reading it does not necessarily preclude a party from avoiding a contract for misrepresentation.

Question 36

Innocent Party May Rescind Agreement and Recover Damages

Answer 36

Note that the innocent party doesn’t have to wait until they’re sued on the contract but may take affirmative action in equity to rescind the agreement. In addition, they may pursue all remedies available for breach of contract (see 8, infra).

Question 37

ABSENCE OF CONSIDERATION

Answer 37

If the promises exchanged at the formation stage lack the elements of bargain or legal detriment, no contract exists. In this situation, one of the promises is always illusory.

Question 38

PUBLIC POLICY DEFENSES—ILLEGALITY

Answer 38

If the consideration or subject matter of a contract is illegal (for example, a contract to commit a murder), the contract is void. Exceptions: (1) the plaintiff is unaware of the illegality while the defendant knows of the illegality; (2) the parties are not in pari delicto (that is, one party is not as culpable as the other); or (3) the illegality is the failure to obtain a license when the license is for revenue-raising purposes rather than for protection of the public. If only the purpose behind the contract is illegal, the contract is voidable by a party who was (1) unaware of the purpose; or (2) aware but did not facilitate the purpose and the purpose does not involve serious moral turpitude.

Question 39

Unconscionability

Answer 39

This doctrine, originally applicable only to sales of goods, but (1) now a part of K's law generally (2) empowers a court to refuse to enforce all or part of an agreement. Basic test: (1) unfair surprise and oppressive terms that are (2) tested as of the time the agreement was made by (3) the court (time of agreement is a bar favorite, long term K that now looks one-sided --> NOT unconscionable)

Question 40

UNCONSCIONABILITY

Answer 40

The concept of unconscionability allows a court to modify or refuse to enforce an entire contract or a provision in it to avoid “unfair” terms, usually due to some unfairness in the bargaining process (that is, procedural unconscionability). Unfair price alone is not a ground for unconscionability.

Question 41

Basic test for UNCONSCIONABILITY

Answer 41

- unfair surprise and - oppressive terms that are - tested as of the time the agreement was made (formation) - by the court

Question 42

Unconscionability is tested when?

Answer 42

At time the agmt was made (formation)

Question 43

a. Inconspicuous Risk-Shifting Provisions

Answer 43

Standardized printed form contracts often contain a material provi- sion that seeks to shift a risk normally borne by one party to the other. Typically, these clauses are found in the fine print (“boilerplate”) in printed form contracts. Courts have invalidated these provisions because they are inconspicuous or incomprehensible to the average person, even if brought to their actual attention.

Question 44

b. Contracts of Adhesion—“Take It or Leave It”

Answer 44

Courts will deem a clause unconscionable and unenforceable if the signer is unable to procure necessary goods, such as an automobile, from any seller without agreeing to a similar provision.

Question 45

c. Exculpatory Clauses

Answer 45

An exculpatory clause releasing a contracting party from liability for their own intentional wrongful acts is usually found to be unconscio- nable because such a clause is against public policy in most states. Exculpatory clauses for negligent acts may be found to be uncon- scionable if the clauses are inconspicuous (as discussed above), but they commonly are upheld if they are in contracts for activities that are known to be hazardous (for example, a contract releasing a ski hill operator for liability for negligence often will be upheld).

Question 46

d. Limitations on Remedies

Answer 46

A contractual clause limiting liability for damages to property gener- ally will not be found unconscionable unless it is inconspicuous. But, a contract that limits a party to a certain remedy and that remedy fails of its essential purpose (for example, the contract limits remedies to repair and the item cannot be repaired), the limitation may be found unconscionable and courts will ignore it.

Question 47

Unconscionability - Timing

Answer 47

Unconscionability is determined by the circumstances as they existed at the time the contract was formed.

Question 48

Effect If Court Finds Unconscionable Clause

Answer 48

If a court finds as a matter of law that a contract or any clause of the contract was unconscionable when made, the court may: (1) refuse to enforce the contract; (2) enforce the remainder of the contract without the unconscionable clause; or (3) limit the application of any clause so as to avoid an unconscionable result.

Question 49

Duress (economic)

Answer 49

(1) "bad guy" - makes an improper threat (2) vulnerable guy - no reasonable alternative but to agree

Question 50

Duress and Undue Influence

Answer 50

Contracts induced by duress or undue influence are voidable and may be rescinded as long as they are not affirmed. The common type of duress occurs when a party’s assent is procured by an improper threat (for example, “sign the contract or I’ll break your legs”). Generally, taking advantage of another person’s economic needs is not duress, but withholding something someone wants or needs will constitute economic duress if: (1) the party threatens to commit a wrongful act that would seriously threaten the other contracting party’s property or finances; and (2) there are no adequate means available to prevent the threatened loss. Elements of undue influence are: (1) undue susceptibility to pressure by one party, and (2) excessive pressure by the other party. Undue influ- ence concerns often arise when the dominant party is in a confiden- tial or caregiver relationship with the influenced party.

Question 51

Contracts induced by duress or undue influence are...

Answer 51

Contracts induced by duress or undue influence are voidable and may be rescinded as long as they are not affirmed.

Question 52

Generally, taking advantage of another person’s economic needs is not duress, but withholding something someone wants or needs will constitute economic duress if:

Answer 52

Generally, taking advantage of another person’s economic needs is not duress, but withholding something someone wants or needs will constitute economic duress if: (1) the party threatens to commit a wrongful act that would seriously threaten the other contracting party’s property or finances; and (2) there are no adequate means available to prevent the threatened loss.

Question 53

Elements of undue influence are: (2)

Answer 53

Elements of undue influence are: (1) undue susceptibility to pressure by one party, and (2) excessive pressure by the other party. Undue influ- ence concerns often arise when the dominant party is in a confiden- tial or caregiver relationship with the influenced party.

Question 54

STATUTE OF FRAUDS

Answer 54

In most instances, an oral contract is valid. However, certain agreements, by statute, must be evidenced by a writing signed by the party sought to be bound.

Question 55

Statute of Frauds and 6 major categories where SoF applies

Answer 55

When is a Writing Required? Most oral K's are enforceable - only certain kinds of Ks need a writing to be enforced (i.e the ones that fall "within the SoF") 6 major SoF Categories: MYLEGS (1) Marriage (2) year (3) land sale (4) executor (5) goods $500+ (6) Surety

Question 56

6 major SoF Categories:

Answer 56

MYLEGS (1) Marriage (2) year (3) land sale (4) executor (5) goods $500+ (6) Surety

Question 57

Marriage

Answer 57

K's in consideration of marriage are subject to SoF, but NOT a promise to marry - hypo: P claims that A promised to relinquish claims to her assets if she agreed to marry her. this promise is within the SoF

Question 58

Promises in Consideration of Marriage

Answer 58

A promise the consideration for which is marriage must be evidenced by a writing. This applies to promises that induce marriage by offering something of value (other than a return promise to marry—for example, “if you marry my son, I will give the two of you a house”).

Question 59

Prenups?

Answer 59

Must be in writing, within the SOF.

Question 60

Year

Answer 60

Contracts which cannot possibly be completed in 1 year or less are subject to SoF - look at dates! - DOES NOT matter if performance actually takes more than a year; as long as full performance within a year was theoretically possible no writing is required by the SoF - look for specified dates in MBE questions (if no dates specified taking you longer than a year, the SoF does not apply for this year category) - life time employment K's not subject to SoF BUT three year employment K's ARE subject to SoF

Question 61

Performance Not Within One Year from Date of Contract

Answer 61

A promise that by its terms cannot be performed within one year is subject to the Statute of Frauds. Part performance does not satisfy the Statute of Frauds in this case. The date runs from the date of the agreement and not from the date of performance. Note that, even if the contract can’t be performed within a year, full performance by one party will remove it from the Statute.

Question 62

year: no writing is required unless...

Answer 62

contract terms require performance more than 1 year after date of formation.

Question 63

Year: For the SOF to apply, you must...

Answer 63

See terms that force you out beyond 1 year.

Question 64

Land Sale/Transfer if an Interest in Real Property

Answer 64

- can be a sale of land - can be a lease that lasts for more than one year - can be an easement that lasts for more than one year * all of these would be subject to SoF *NOTE: authorization to enter into a K on behalf of someone else (i.e. X authorizes an agent to sell the ranch - must the agent's authorization be in writing? Generally these do not need to be in writing UNLESS the underlying deal would be subject to the Sof, which here it would because sale of land so YES subject to SoF)

Question 65

Interest in Land

Answer 65

A promise creating an interest in land must be evidenced by a writing. This includes not only agreements for the sale of real property, but also: • Leases for more than one year • Easements of more than one year • Mortgages and most other security liens • Fixtures • Minerals (or the like) or structures if they are to be severed by the buyer

Question 66

SOF for Interest in Land includes:

Answer 66

• Agreements for the sale of real property, but also: • Leases for more than one year. • Easements of more than one year. • Mortgages and most other security liens • Fixtures • Minerals (or the like) or structures if they are to be severed by the buyer

Question 67

Items that Do Not Create an Interest in Land

Answer 67

Contracts to build a building or to find a buyer for a seller (for example, a broker’s contract) do not create an interest in land.

Question 68

Are Construction Contracts within the SOF?

Answer 68

Construction Contracts are NOT necessarily within the SOF.

Question 69

LAND: Effect of Performance on Contracts

Answer 69

Full performance by the seller will take the contract out of the Statute of Frauds. Part performance by the buyer may also remove the contract from the Statute.

Question 70

Authorization - Equal dignity rule

Answer 70

Must be in equal dignity to the underwriting deal. So to sell land, agent's authorization must be in writing bc the sale of land must be in writing. BUT if underlying contract is not subject to SOF, you can have oral authorization.

Question 71

Billy Ray Cyrus alleges that Lil Nas X agreed to sell him the Old Town Road Ranch for $4,000,000. Lil Nas X authorizes an agent to sell the ranch. Must the agent’s authorization be in writing?

Answer 71

YES. Equal dignity rule.

Question 72

Executor

Answer 72

Promises by Executor of an estate to pay the estate's debts from some other source of funds/out of his own pockets are within the SoF (not likely to be tested).

Question 73

Sale of Goods for $500 or more

Answer 73

SoF applies does not have to be more than 500, can just be 500.

Question 74

Goods Priced at $500 or More

Answer 74

A contract for the sale of goods for a price of $500 or more is within the Statute of Frauds and generally must be evidenced by a signed writing to be enforceable. Note that a writing is sufficient even though it omits or incorrectly states a term, but the contract is not enforceable beyond the quantity of goods shown in the writing.

Question 75

To determine whether the SoF is satisfied (and the contract is enforceable), look carefully for a ___.

Answer 75

To determine whether the Statute of Frauds is satisfied (and the contract is enforceable), look carefully for a writing signed by the party to be charged (that is, sued). If only one party signed the writing, first check to see if the signature is of the party being sued. If not, consider whether the merchants’ confirmatory memo rule applies. Be sure that the contract is between merchants; if not, that rule doesn’t apply, and the signature of one party cannot bind the other.

Question 76

Suretyship

Answer 76

A promise to answer for (i.e. guarantee) the debt another person. - watch out: NOT a mere promise to pay MOney. not a primary promise to pay - surety category is regularly tested as the WRONG answer

Question 77

Promises to Pay Debt of Another (Suretyship Promises)

Answer 77

A promise to answer for the debt or default of another must be evidenced by a writing. The promise may arise as a result of a tort or contract, but it must be collateral to another person’s promise to pay, and not a primary promise to pay. However, if the main purpose or leading object of the promisor is to serve a pecuniary interest of his own, the contract is not within the Statute of Frauds even though the effect is still to pay the debt of another (for example, homeowner promises to pay contractor’s debt to building supplier if contractor does not pay, so contractor can obtain supplies to work on homeown- er’s house).

Question 78

I have no contract with Beyoncé. Kelly tells me, “Paint Beyoncé’s house and I will pay you $10,000.” Is Kelly’s promise to pay me within the Statute of Frauds?

Answer 78

No, not within the SOF

Question 79

MY LEGS:

Answer 79

MY LEGS: Marriage (Within one) Year Land Executor (or Administrator) Goods (for $500 or more) Surety

Question 80

Effect of Noncompliance with the Statute

Answer 80

Noncompliance with the Statute of Frauds renders the contract unenforceable at the option of the party to be charged. In other words, the party being sued may raise the lack of a sufficient writing as an affirmative defense. If the Statute isn’t raised as a defense, it is waived.

Question 81

When Contract Is Removed from Statute of Frauds

Answer 81

a. Contract Modifications b. Performance c.

Question 82

Contract Modification and Interaction with SoF

Answer 82

The modification must be in writing ONLY if the MODIFIED CONTRACT [K as modified (not the original K)] is within the SoF. ** if OG written K prohibits oral modification; then modification HAS to be in writing regardless of this rule **EXAM TIP: under Cl clauses that prohibit oral modifications, are generally not enforceable so you can generally modify a K orally under common law, even if you have agreed not to!

Question 83

a. Contract Modifications

Answer 83

A written contract can be modified orally, but the modification must be in writing if the contract as modified falls within the Statute of Frauds. So, for a sale of goods contract, if the contract as modified is for $500 or more, it must be evidenced by a writing; if the contract as modified is for less than $500, no writing is necessary.

Question 84

Modification of a sale of goods contract: SOF?

Answer 84

So, for a sale of goods contract, if the contract as modified is for $500 or more, it must be evidenced by a writing; if the contract as modified is for less than $500, no writing is necessary.

Question 85

Clause prohibiting oral modification

Answer 85

- Unenforceable in COMMON LAW contracts. - ENFORCEABLE in ARTICLE 2 Contracts. If the parties agree that all mods have to be in writing, this is enforceable.

Question 86

Common Law—Provisions Prohibiting Oral Modification Not ENFORCEABLE

Answer 86

The common law rule is that even if a written contract expressly provides that it may be modified only by a writing, the parties can orally modify the contract.

Question 87

UCC— Clauses prohibiting oral modification ARE Effective

Answer 87

Under the UCC, if a contract explicitly provides that it may not be modified or rescinded except by a signed writing, that provision is given effect. If the contract is between a merchant and nonmerchant, however, this provision requires the nonmer- chant’s separate signature.

Question 88

Contract modifications: Waiver

Answer 88

If the parties attempt to orally modify a contract that requires written modification (either because of a contract clause or the Statute of Frauds), it is technically ineffective as a modification but can operate as a waiver. A waiver will be found whenever the other party has changed position in reliance on the oral modification. However, a party who makes a waiver affecting an executory (not yet performed) portion of the contract may retract the waiver if they notify the other party that strict perfor- mance of the waived terms is required. The waiver may not be retracted if the other party detrimentally relied on it.

Question 89

Land Sales Exceptions to SoF (2 of them)

Answer 89

a. Lease of =< 1 year. If u have a lease thats 1 year or less, it can be oral. b. Part performance of Real Estate contracts: Payment, possession, improvement (need 2 out of 3) to satisfy SoF.

Question 90

To be subject to the SoF, a lease has to be...

Answer 90

more than 1 year.

Question 91

When Contract Is Removed from Statute of Frauds: Performance - (3 types)

Answer 91

Land Sale Contracts. Services Contracts Sale of Goods Contracts

Question 92

Part performance of Real Estate contracts - to satisfy SoF, need:

Answer 92

b. Part performance of Real Estate contracts: Payment, possession, improvement (need 2 out of 3) to satisfy SoF.

Question 93

When Contract Is Removed from Statute of Frauds: Performance - Land Sale Contracts

Answer 93

If a seller conveys property to the buyer (that is, they fully perform), the seller can enforce the buyer’s oral promise to pay. Likewise, the buyer may seek to specifically enforce an oral land sale contract under the doctrine of part performance. Part performance that unequivocally indicates that the parties have contracted for the sale of land takes the contract out of the Statute of Frauds. Most jurisdictions require at least two of the following: payment (in whole or in part), possession, and/or valuable improvements. Specific Performance Only: A purchaser of an interest in land may enforce an oral contract in this manner only in equity (meaning, they may sue only for specific performance, not damages).

Question 94

Beyoncé alleges that Kelly Rowland orally agreed to sell her Kelly’s New Orleans mansion for $4,000,000. Beyoncé paid Kelly the entire $4,000,000. Does Beyoncé’s full payment satisfy the SOF?

Answer 94

NO! thats just 1 one of the 3. Needs to move in or make improvements.

Question 95

SoF Exception for service contracts

Answer 95

Full performance of service contracts satisfies SoF, no writing needed. But PARTIAL performance does NOT. BUT, turn to restitution to bail out P.

Question 96

When Contract Is Removed from Statute of Frauds: Performance - Services Contracts:

Answer 96

Services Contracts—Full Performance Required: an oral contract that cannot be completed within one year but has been fully performed by one party is enforceable.

Question 97

When Contract Is Removed from Statute of Frauds: Performance - Sale of Goods Contracts:

Answer 97

Sale of Goods Contracts: Part performance takes a sale of goods contract out of the Statute of Frauds when: (1) the goods have been specially manufactured, or (2) the goods have been either paid for or accepted. If a sales contract is only partially paid for or accepted, the contract is enforceable only to the extent of the partial payment or acceptance. If goods are either received and accepted or paid for, the contract is enforceable. However, the contract is not enforceable beyond the quantity of goods accepted or paid for. Thus, if only some of the goods called for in the oral contract are accepted or paid for, the contract is only partially enforceable. If an indivisible item is partially paid for, most courts hold that the Statute of Frauds is satisfied for the whole item.

Question 98

Part performance takes a sale of goods contract out of the Statute of Frauds when:

Answer 98

(1) the goods have been specially manufactured (substantial beginning on custom goods), or (2) the goods have been either paid for, OR (3) the goods have been accepted. BUT, doesnt apply if you cannot apportion the good.

Question 99

Custom-made goods (the goods have been specially manufactured) - you must show...

Answer 99

Must show SUBSTANTIAL BEGINNING on custom goods. Enough has been done that these have been to order, seller cannot sell to anyone else.

Question 100

When Writing Not Required: There are three situations in which contracts are enforceable without the writing:

Answer 100

- Specially Manufactured Goods - Admissions in Pleadings or Court - Merchants—Confirmatory Memo Rule

Question 101

Specially Manufactured Goods

Answer 101

If goods are to be specially manufactured for the buyer and are not suitable for sale to others by the seller in the ordinary course of their business, the contract is enforceable if the seller has, under circumstances that reasonably indicate that the goods are for the buyer, made a substantial beginning in their manufacture or commitments for their purchase before notice of repudiation is received.

Question 102

Judicial Admissions in Pleadings or Court

Answer 102

IF Agreement admitted to under oath - enforceable without writing. If the party against whom enforcement is sought admits in pleadings, testimony, or otherwise in court that the contract for sale was made, the contract is enforceable without a writing (but in such a case the contract is not enforced beyond the quantity of goods admitted).

Question 103

Merchants—Confirmatory Memo Rule

Answer 103

- Merchant to Merchant - Agree to Contract - One party sends SIGNED writing containing QUANTITY terms - No objection by recipient within 10 days. In contracts between merchants, if one party, within a reasonable time after an oral agreement has been made, sends to the other party a written confirmation of the understanding that is sufficient under the Statute of Frauds to bind the sender, it will also bind the recipient if: (1) they have reason to know of the confirmation’s contents; and (2) they do not object to it in writing within 10 days of receipt.

Question 104

Two merchants agree over the phone and one sends a written confirmation to the other. Outcome?

Answer 104

two merchants agree over the phone and one sends a written confirmation to the other. Article 2 lets one merchant use its own confirmation to satisfy the Statute of Frauds against another merchant.

Question 105

Exceptions to SoF (i.e. where you don't need a writing)

Answer 105

Carved out where there is a less chance of fraud (1) Land Sale/Real Property Exceptions to Sof - leases of one year or less, part performance of real estate sale K (2) Full Performance of Service K Satisfies the SoF, but Part Performance Does Not (3) Sale of Goods for $500 or More (Article 2 SoF) - goods accepted or paid for by Buyer, custom made goods, judicial admission, merchants confirmatory memo (4) Suretyship: the main purpose exception

Question 106

Equitable and Promissory Estoppel

Answer 106

Estoppel may be applied if it would be inequitable to allow the Statute to defeat a meritorious claim. Examples include situations where the defendant falsely and intentionally tells the plaintiff that the contract is not within the Statute or induces the plaintiff to change position in reliance on an oral agreement.

Question 107

Judicial Admission

Answer 107

If a party admits in pleadings or testimony that there is an agreement, it’s treated the same as though the party signed a writing.

Question 108

Land Sale/Real Property SoF Exception

Answer 108

(1) Land Sale/Real Property Exceptions to Sof - leases of one year or less - legislative exception to protect tenants - "part performance" of real estate sale K - need 2 out of 3 (1) some payment (2) possession, and/or (3) improvements

Question 109

Goods Accepted or Paid for by the Buyer

Answer 109

No SoF defense, Sof satisfied for what the buyer has already paid for - should get those goods BUT S will have Sof defense for the goods NOT paid for IF Buyer puts in 10k deposit for boat, and S refusing to deliver, SoF defense no more available for S, S has to give the entire boat (because cannot apportion boat like you can x amount of widgets)

Question 110

Custom-Made Goods

Answer 110

Need to show a "substantial beginning" to satisfy SoF --i.e. that the goods are custom made/not suitable for sale to others

Question 111

Judicial Admission

Answer 111

Satisfies SoF If a defendant admits under oath that she had a deal with the Seller/ Buyer then she will later lose her SoF defense

Question 112

Merchants' Confirmatory Memo

Answer 112

One party can use its own signed writing to satisfy the SoF agains the other party if (1) both parties are merchants (2) writing claims agreement and has quantity AND (3) there's no written objection within 10 days Bar Exam Tip: 2 merchants talking on phone, and one sends a written confirmation to the other. Article 2 lets one merchant use its own confirmation to satisfy the SoF against another merchant

Question 113

Suretyship: the "Main Purpose" Exception Takes us outside of SoF

Answer 113

I buy paint on credit fro Home Depot to pain B's house. Gates orally promises to pay Home Depot if I don't pay (suretyship); can Home Depot still enforce Gate's oral promise against him? Yes, if main purpose is to benefit himself then NO WRITING IS REQUIRED

Question 114

What is an adequate writing to satisfy SoF

Answer 114

Depends on the nature of the K Sale of Goods (Article 2): must contain a (1) quantity and (2) be signed by party to be charged with breach (against whom enforcement is brought) [Defendant's signature]. Common Law: writing MUST have all (1) material terms (be able to answer who and what concerning the K) and (2) be signed by the defendant.

Question 115

If you have a SALE OF GOODS at $500 or more, youy need...

Answer 115

The writing must contain a QUANTITY term and be signed by the Defendant (party charged with breach).

Question 116

What is an adequate writing to satisfy SoF under UCC

Answer 116

Sale of Goods (Article 2): - must contain a (1) quantity and (2) be signed by party to be charged with breach (against whom enforcement is brought)

Question 117

What is an adequate writing to satisfy SoF under COMMON LAW?

Answer 117

Common Law: - writing MUST have all (1) material terms (be able to answer who and what concerning the K) and (2) be signed by the defendant.

Question 118

SOF Writing Requirement

Answer 118

The Statute of Frauds doesn’t require a formal written contract. Among other things, the writing can be a receipt, a letter, a check with details in the memo line, or a written offer that was accepted orally. The Statute requires only one or more writings that: (1) reasonably identify the subject matter of the contract, (2) indicate that a contract has been made between the parties, and (3) state with reasonable certainty the essential terms.

Question 119

Electronic Record Satisfies Writing Requirement

Answer 119

If a law requires a record to be in writing, an electronic record (such as an email) satisfies the law.

Question 120

Essential or Material Terms

Answer 120

There is no definitive list of essential terms. What is essential depends on the agreement, its context, and the subsequent conduct of the parties, including the dispute that has arisen. There must be enough in the writing to enable a court to enforce the contract. If an essential term is contained in the writing, evidence is admissible to explain the particulars, but evidence will not be admitted to add a missing term. Examples of essential terms include: identity of the parties, description of the subject matter, and the terms necessary to make the contract definite. Writings evidencing land sale contracts must contain a description of the land and the price, and those for employment contracts must state the length of employment. For the sale of goods, the UCC requires only some signed writing indicating that a contract has been made and specifying the quantity term. • Writings evidencing land sale contracts must contain a description of the land and the price • Writings for employment contracts must state the length of em- ployment • Writings evidencing sales of goods contracts (UCC) must indicate that a contract has been made and specify the quantity term

Question 121

Writings evidencing land sale contracts must contain....

Answer 121

• Writings evidencing land sale contracts must contain a description of the land and the price

Question 122

Writings for employment contracts must state...

Answer 122

• Writings for employment contracts must state the length of em- ployment

Question 123

Writings evidencing sales of goods contracts (UCC) must indicate...

Answer 123

• Writings evidencing sales of goods contracts (UCC) must indicate that a contract has been made and specify the quantity term

Question 124

Can several pieces of correspondence (including electronic correspondence) between the parties satisfy the SOF?

Answer 124

YES, to be sufficient under the Statute of Frauds, the writing need not be a full-fledged contract, nor need it even be one piece of paper.. Thus, several pieces of correspondence (including electronic correspondence) between the parties could be sufficient memoranda of the agreement; an email or a memo written on a napkin also could suffice. The key is that there be something in writing evidencing the essential terms.

Question 125

Signature Requirement

Answer 125

The signature requirement is liberally construed by most courts. A signature is any mark or symbol made with the intention to authen- ticate the writing as that of the signer. It need not be handwritten; it can be printed or typed. Under the UCC, a party’s initials or letter- head may also be sufficient. An electronic signature is also sufficient.