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Flashcards in Chapter 16 Deck (50)
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1
Q

Statute of Frauds origins

A

you couldn’t testify for yourself, you would have to hire third-party witnesses

2
Q

Requirements of the Statute of Frauds:

A
  1. Contract is in writing; and
  2. Signed by the party against whom enforcement is sought (or by the party to be charged with the damages for breach or the party to be sued), subject to certain exceptions
3
Q

Do you have to have both parties sign the contract under Statute of Frauds?

A

Statutes of frauds does NOT say that both parties have to sign the contract. I need to approach it with “I think you are going to breach the contract” so I need to get your signature in case you breach the contract.

4
Q

Contracts that “Fall Under” or “Fall Within” the Statute of Frauds

A

Contracts that require writing

5
Q

Contracts that require writing:

A
  1. Contracts involving interests in land
  2. Contracts that cannot be performed within 1 year
  3. Collateral promise
  4. Promises made in consideration of marriage
  5. Contracts for the sale of goods
6
Q

Real property includes…

A

land and anything permanently attached to the land. Any contract involving anything related to the land (ex: mineral rights, swimming pool, house, building, etc.)

7
Q

Other interests in land include…

A

mortgages, leases, and easements (access rights).

8
Q

One exception to leases…

A

30-day (month-to-month) lease… you wouldn’t need a written contract

9
Q

What are the most common easements?

A

Utility, cable, city easements

10
Q

The “one-year” rule

A

(PERFORMANCE BASED IDEA) Contracts that cannot by their own terms be performed within 1 year are under the Statute of Frauds. If it’s going to take longer than a year to fully perform the contract, Statute of Frauds requirements must be fulfilled.

11
Q

So…if a contract can be fully performed within 1 year, the contract is…

A

NOT under the Statute of Frauds…meaning the contract can be oral

12
Q

Possibility of performance

A

If performance is possible within one year, even if it is highly improbable, an oral contract is enforceable

13
Q

When does the year begin in the one-year rule?

A

From the day after the contract is made, and not from the date upon which performance is to begin. (365 days) always falls on the day before in the next year – if the contract was signed on October 17th, 2023 it would end October 16th, 2024.

14
Q

If the time for performance is of uncertain duration but depends upon some contingency that may occur within a year…

A

an oral contract is enforceable

15
Q

What if performance actually takes more than one year, is an oral contract enforceable?

A

Yes as long as performance was possible within one year

16
Q

Which of these job offers are Under the Statute of Frauds (assume you are 22 years old):
a. You have a job with this company, as long as we are in business
b. You have a job with this company for life
c. You have a job with this company until you reach retirement age
d. A & B are both under the statute of frauds
e. A, B, and C are all under the statute of frauds

A

C. not possible to do within the year. you cannot possibly be 65 within a year if you are currently 22

17
Q

Superior University forms a contract with Kimi San stating that San will teach three courses in history during the coming academic year (September 15 through June 15). If the contract is formed in March, does the contract have to be in writing?

A

Yes. It cannot be performed within one year. (March to March)

18
Q

Superior University forms a contract with Kimi San stating that San will teach three courses in history during the coming academic year (September 15 through June 15). If the contract is formed in July, does the contract have to be in writing?

A

No, it does not have to be in writing to be enforceable. The contract can be performed within one year.

19
Q

Does a contract to provide five crops of tomatoes to be grown on a specific farm in Illinois have to be written?

A

Yes. It is objectively impossible to perform within one year. No farmer in Illinois can grow five crops of tomatoes in a single year.

20
Q

On May 1, by telephone, Yu offers to hire Benson to perform personal services. On May 5th, Benson returns Yu’s call and accepts the offer. Discuss fully whether this contract falls under the Statute of Frauds in the following circumstances:

Contract is formed on May 6th. The contract ends on May 5th the following year.

(a) The contract calls for Benson to be employed for one year, with the right to begin performance immediately.
(b) The contract calls for Benson to be employed for 9 months, with performance to begin on September 1.
(c) The contract calls for Benson to submit a written research report, with a deadline of two years for submission. It is possible to submit it before the deadline.

A

a) Oral is enforceable - NOT under Statute of Frauds
b) Under Statute of Frauds. Isn’t performed within 1 year. . (Start with October 1st in counting – you haven’t worked for a month until October 1st. Performance wouldn’t be fulfilled until May 31st.)
c) It is possible to submit it before the deadline. It is possible to do it in less than a year. Oral is enforceable – not under Statute of Frauds

21
Q

Collateral Promises

A

Secondary promises instead of primary promises. A promise made by a 3rd party to assume the debt of the primary party to a contract if the primary party does not perform.

22
Q

When is a collateral promise within the Statute of Frauds?

A
  1. The promise is made to the creditor by a person not presently liable for the debt
  2. The liability of the gaurantor is secondary and collateral to that of the principal debtor
23
Q

Guarantor

A

The promisor to the creditor who currently does not have a duty to perform the contract

24
Q

Example of Gaurantor

A

Parent guarantees your lease with the landlord

25
Q

Connor tells Leanne Lu, an orthodontist, that he will pay for the services provided by Connor’s niece, Allison.

A

Because Connor has assumed direct financial responsibility for his niece’s debt, this is a primary obligation and need not be in writing to be enforceable.

26
Q

Connor commits to paying Allision’s orthodontist bill only if her mother does not.

A

Secondary obligation. Lu must have a signed writing or record proving that Connor assumed this secondary obligation for it to be enforced.

27
Q

What if a secondary promise is made to the principal debtor instead of the creditor?

A

The promise is not within the Statute of Frauds and does not have to be in writing.

28
Q

I have graduated from A&M, got CPA. I’m concerned about making rent. Parent says “don’t worry about it…I’ll help you out if you can’t make rent.”

A

This is not a contract - this is a gift.

29
Q

Mallory promises to local hardware store that she will pay for a lawn mower that her brother is purchasing on credit if the brother fails to pay the debt. Must this promise be in writing to be enforceable?

A

Yes. The promise would be unenforceable if it is not in writing.

30
Q

“Main Purpose Rule” Exception

A

If the main purpose or leading objective of the secondary promisor (guarantor) when making the promise to the creditor, is to protect his or her own interest or to secure a personal benefit, an oral promise is enforceable.

31
Q

Carlie Braswell contracts with Winsom Manufacturing Company to have some machines custom-made for her factory. She promises Newform Supply, Winsom’s supplier, that if Newform continues to deliver the materials to Winsom for the production of the custom-made machines, she will guarantee payment.

A

This promise need not be in writing, even though the effect may be to pay the debt of another. This is because Braswell’s main purpose in forming the contract is to secure a benefit for herself.

32
Q

Debtor has 3-4 different creditors. He is underwater for all of the creditors. It is possible that one of the creditors to go to the other and guarantee the debt owed.

A

Benefit is to themselves. They want to recoup at least some of their losses.

33
Q

Executor of estate. Gather assets, use assets to pay debts. Then distribute assets in accordance to the wishes of the deceased. If the executor of the estate ever promises to pay the debt’s personally…

A

it is a collateral promise. Oral conversation does not obligate them.

34
Q

Promises Made in Consideration of Marriage

A

Unilateral promises to pay money or give other property in exchange for promises to marry and prenuptial agreements must be in writing in order to be enforceable.

35
Q

Contracts for the Sale of Goods

A

In order for a contract for the sale of goods for a price of $500 OR MORE to be enforceable, there must be a writing indicating that a contract was made by the parties and the written agreement must be signed by the party to be charged.

36
Q

Exceptoins to the Statutes of Frauds

A
  1. Partial performance
  2. Admissions
  3. Promissory estoppel
  4. Special exceptions under the UCC
37
Q

A court may use the doctrine of promissory estoppel (detrimental reliance) to permit recovery under an oral contract, which would otherwise be unenforceable because of the Statute of Frauds, if:

A
  1. the reliance was foreseeable to the party making the oral promise; and
  2. if injustice can be avoided by enforcing the promise.
38
Q

What constitutes a writing?

A

Any order confirmation, invoice, sales slip, check, fax, email, or text messages
Can be more than a single document

39
Q

Lucy vs. Zehemer writing

A

Written contract on a receipt or napkin was never questioned

40
Q

What Must Be Contained in the Writing?

Memorandum/Other Writing Evidencing the Contract

A

Need only contain the basic, essential terms of the contract

41
Q

What Must Be Contained in the Writing?

Contract for the Sale of Goods

A

Quantity must be indicated

42
Q

What Must Be Contained in the Writing?

Other contracts

A

parties, subject matter, consideration, and any other essential terms must be indicated with reasonable certainty.

43
Q

What Must Be Contained in the Writing?

Contract for the Sale of Land

A

In some states, the writing must contain the price and description of the property. Texas requires.

44
Q

Who Must Have Signed the Writing?

A

The writing must be signed by the party against whom enforcement is sought (the party charged) or his authorized agent.

45
Q

Simpson orally agrees to sell some land next to a shopping mall to Terro Properties. Simpson gives Terro an unsigned memo that contains a legal description of the property, and Terro gives Simpson an unsigned first draft of their real estate contract. Simpson sends Terro a signed letter that refers to the memo and to the first and final drafts of the contract. Terro sends Simpson an unsigned copy of the final draft of the contract with a signed check stapled to it.

A

Together, the documents can constitute a writing sufficient to satisfy the writing requirement and bind both parties to the terms of the contract.

46
Q

Parol Evidence Rule

A

Oral testimony or other evidence of communications between the parties that is not contained in the written contract itself

47
Q

If a court finds that a written contract represents the complete and final statement of the parties’ agreement…

A

it will not allow either party to present parol evidence

48
Q

If a written contract is complete and final then neither party can present evidence of:

A
  1. Prior negotiations
  2. Prior agreements
  3. Contemporaneous oral agreements
49
Q

If written instrument is considered to the complete, integrated agreement, final statement of the parties…

A

the court will NOT allow parties to present parol evidence

50
Q

Parole evidence is admitted to show:

A
  1. Contracts subsequently modified.
  2. The contract was void or voidable.
  3. The meaning of ambiguous or vague language.
  4. The writing is incomplete. We are missing a page
  5. A prior course of dealings, course of performance, or usage in a trade.
  6. The contract was subject to orally agreed-upon conditions.
  7. Obvious or gross typographical or clerical errors.