Statute of Frauds - Jan. 30

Question 1

What does writing mean for the purposes of UCC 2-201? (Chinen)

Answer 1

“Writing” includes printing, typewriting, or any other intentional reduction to tangible form. “Written” has a corresponding meaning. (UCC 1-201(43))

Question 2

What does signed mean for the purposes of UCC 2-201? (UCC)

Answer 2

“Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing. (1-201(37))

Question 3

How does a contract satisfy the statute of frauds? (Chinen)

Answer 3

A contract satisfies the statute of frauds when both the writing and the signature requirements are met. (Video Lecture on the Statute of Frauds)

Question 4

What is overenforcement of a contract? (Chinen)

Answer 4

Overenforcement happens when parties are forced into a contract they did not intend to enter. (Video Lecture on the Statute of Frauds)

Question 5

What is underenforcement of a contract? (Chien)

Answer 5

Underenforcement happens when parties have actually entered into a contract, but, if for some reason the statute is not satisfied, the contract will not be enforced. (Video Lecture on the Statute of Frauds)

Question 6

What do you always have to consider in a statute of frauds analysis? (Chinen)

Answer 6

You always have to consider whether one or more exceptions applies. (Video Lecture on the Statute of Frauds)

Question 7

What happens if an exception applies? (Chinen)

Answer 7

That exception takes the contract outside the statute of fraud. (Video Lecture on the Statute of Frauds)

Question 8

Under UCC 2-201(2), what is the merchant exception? (Chinen)

Answer 8

Between merchants if within a reasonable time a writing in confirmation of the contract 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. (Video Lecture on the Statute of Frauds)

Question 9

What is the specially manufactured goods exception as outlined in UCC 2-201(3)(a)? (Chinen)

Answer 9

If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s 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. (Video Lecture on the Statute of Frauds)

Question 10

What is the acronym for the state of frauds?

Answer 10

MY LEGS

Marriage
Year (or longer till performance)
Land (Contracts, buying not building)
Executory (Promises to use own money for estate purposes)
Goods over $500
Surety (To guarantee the debt of another)

Question 11

What six classes of contracts fall within the statute of frauds? (R)

Answer 11

(A) A contract of an executor or administrator to answer for a duty of his decedent (the executor administrator provision);

(B) A contract to answer for the duty of another (the suretyship provision);

(C) A contract made upon consideration of marriage (the marriage provision);

(D) A contract for the sale of an interest in land (the land contract provision);

(E) A contract that is not to be performed within one year from the making thereof (the one-year provision). (110)

Question 12

What is a suretyship contract? (R)

Answer 12

A suretyship contract is one in which the promisor, or surety, promises to answer for the duty of another person, typically by promising to pay another person’s debt. (Definitions)

Question 13

When does a suretyship contract not fall within the statute of frauds? (R)

Answer 13

A suretyship contract does not fall within the Statute of Frauds if the promisor’s main purpose in making the promise is to further her own economic advantage, rather than to benefit the other person. This is commonly known as the main purpose rule. (116)

Question 14

When does the statute of frauds apply to marriage contracts? (R)

Answer 14

It applies when marriage or the promise to marry is a consideration of the contract. (110)

Question 15

What are the three exceptions to the statute of frauds? (UCC)

Answer 15

(1) The goods are specially manufactured goods, but only if the seller has already made a substantial beginning in manufacturing the goods or made a commitment to procure the goods by the time the buyer’s repudiation is received;

(2) The non-injured party admits in court that the contract was made, and

(3) Payment has already been made and accepted, or the goods have already been received and accepted. (2-201)

Question 16

What is the policy reason behind the statute of frauds? (DeLong)

Answer 16

The statute of frauds aims to prevent perjured claims of the existence of contract by requiring a signed writing before some agreements can be enforced. If the memorandum is sufficient to satisfy the judge that a contract exists, the statute is satisfied even if the memorandum is wrong as to some of the terms. (164)

Question 17

What reasons does the statute of frauds exist for? (KentLaw)

Answer 17

Reasons for the statute of frauds

Two reasons are usually given.

(1) The cautionary function: The idea here is that making parties write down their agreement makes the parties take the agreement more seriously, and makes the approach the whole matter less hastily. It makes the parties more carefully about the contract.

Two problems: does it really have this cautionary effect? And, even if it does, why does the statute only apply to some categories and not others? If it is caution we want, why not extend the application of the statute to many other categories?

(2) The evidentiary function: The other idea is that the statute of frauds is supposed to prevent fraud: without a written contract you could come into court and lie about there being a contract or about the terms of the contract.

Problem: This prevents one kind of fraud, but it makes another kind possible. Suppose you and I make an oral contract; there are lots of witnesses, so there is no question that we made a contract and no question as to what the terms are. We don’t put the contract in writing. Then something happens, and I want out–say, market prices fall. So I say, “Yes, I promised, but the contract is not in writing, so it is not enforceable.”

Question 18

What acronym is used to remember the exceptions to the Statue of Frauds?

Answer 18

SWAMP.

S – Contracts for SPECIALLY manufactured goods
W – WAIVER
A – Judicial ADMISSION of contract
M – “MERCHANT MEMORANDUM”
P – PART PERFORMANCE