Flashcards in Contracts 4 - SOF and Interpretation Deck (101)
Statute of Frauds
Contract must be evidenced by a writing signed by the party against whom enforcement is sought.
3 Steps for Evaluating a SOF Issue
1. Does the agreement fall within the SOF?
2. Is the SOF satisfied?
3. Is alternative enforcement available?
6 Categories for SOF
1. Marriage contracts.
2. Contracts not to be performed w/in 1 year of their making.
3. K for the sale of land.
4. K of an executor or administrator to answer for a duty of a decedent.
5. K of guarantee or suretyship.
6. K for sale of goods >$500
Contracts Not to Be Performed Within 1 Year
From the date of making rather than the date of beginning performance. Question is whether it is at all possible to complete the required performance within a year.
Present Conveyance of Land Promised for Money
Is outside of the land provision of the SOF
Real Estate Brokerage Agreements
Are service contracts so not governed by SOF.
Land Sale Contracts
Are governed by SOF if it's a future sale of land or lease of real property.
Must be in writing except:
(1) When the creditor discharges the original debtor from his obligation on the faith of a guarantee by a 3rd party to pay the debt.
(2) Main purpose doctrine. The main purpose of the guarantor is to protect his own economic interests.
Writing Requirement - Timing
Can be written any time before, during, or after contract formation.
All that is necessary is writing be a memorandum of the agreement. E.g.: (1) a letter from one party to a 3rd party describing the agreement.
(2) A written offer, acceptance of which formed the K.
(3) A letter from one of the parties repudiating, but so admitting the agreement.
Writing Requirement - Necessities
(1) The identity of the parties to the trans.
(2) The nature and subject matter of the K.
(3) The essential terms of the agreement such as price and date of performance.
Required Description under the Land Provision
Traditionally needed a formal legal description of the land, some courts now allow an address or other description of the property.
Just needs a symbol or mark used with the intention to authenticate the writing. E.g. initials, stamped or pre-printed signature, or even letterhead.
Tacking Together Multiple Documents
A party may satisfy SOF by using several documents that once combined satisfy all the necessary requirements.
Tacking Together - Signatures
(1) If all docs are signed, or a signed doc incorporates unsigned docs by reference, SOF is satisfied.
(2) If unsigned docs are not incorporated, the signed and unsigned docs satisfy SOF if: (a) Must be at least 1 signed writing unambiguously establishing a K between the parties; (b) Signed an unsigned docs clearly refer to same subject matter; and (c) must be clear and convincing evidence of acquiescence to the unsigned docs by the party against whom enforcement is sought.
SOF may be satisfied with respect to some of the categories via part performance.
Part Performance - Land Contracts
Requires a showing of any or all three:
(1) Payment of all or part of the purchase price.
(2) Taking of possession.
(3) Making substantial improvements to the property.
Part Performance - 1 year+ K's
(1) If fully performed, then an oral K not to be performed in 1 yr becomes enforceable.
(2) If only partially performed, oral 1 yr+ K is not enforceable.
(3) Quantum Meruit is a possible workaround to part performance.
Quasi Contract / Unjust Enrichment
Where one party bestows benefits upon another in connection with an oral K, even if K is barred by SOF, the aggrieved party may recover the value of the benefits incurred.
May be available for detrimental reliance for losses suffered on the faith of an oral K that is unenforceable. Likely if a party promises the other party he will create a signed writing but doesn't actually do it.
Ways to Satisfy UCC SOF - Signed Writing
2. Signed by party against whom enforcement is sought.
3. Must be sufficient to indicate a K for sale has been made between parties. Writing affords basis for believing the oral evidence rests on a real transaction.
4. Must have quantity term. K is unenforceable beyond stated quantity. Except when: (a) other language in writing provides unambiguous basis for measuring the quantity, or (b) output or requirements K's
UCC SOF and Written Offers
Written offers dont satisfy because they dont show a K has been made. A Firm Offer is ok though.
Ways to Satisfy UCC SOF - Merchant's Confirmation
2 merchants and one sends written confirmation, if other fails to send written notice of objection within 10 days:
(1) Confirmation is signed and contains quantity term.
(2) Writing is confirmation of oral K.
(3) Sent w/in a reasonable time of formation.
(4) Must be based on real agreement or discussion and must actually be received.
Ways to Satisfy UCC SOF - In-court Admission/Judicial Estoppel
A party admits in his pleading, testimony, or otherwise in court that a K for sale had been made. K is only enforceable up to the quantity admitted.
Ways to Satisfy UCC SOF - Partial Performance
Works for goods for which payment has been both made an accepted and goods which have been received and accepted. If divisible goods only quantity delivered or paid for, if indivisible good then partial payment renders K fully enforceable.
Ways to Satisfy UCC SOF - Specially Manufactured Goods
(1) The goods are to be specially manufactured for the buyer.
(2) The goods are not suitable for sale to others in the ordinary course of the seller's business.
(3) Seller has substantially begun to manufacture, or made commitments to procure the goods.
(4) The actions undertaken to begin manufacture or procure occurred under circumstances which reasonably indicate that the goods are for the buyer; and
(5) Those actions occurred before the seller received notice of buyer's revocation.
UCC SOF - Promissory Estoppel
1. Majority of courts hold PE is available if a strong case of reliance is shown.
2. Minority say UCC precludes PE.
3. All courts protect general contractors with PE with oral sub contracts.
K's barred by SOF may still be useful in:
(1) Providing evidence in establishing an element of a legal claim other than breach of contract.
(2) Providing evidence establishing a defense to a legal claim apart from breach.
(3) Evidence of the value of the services already rendered.
What judges use to fill in gaps when a K doesn't address a matter. Parties are free to set those rules aside by contracting otherwise though.