BLRB15 - Business Law and the Regulation of Business...

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Unformatted text preview: Business Law and the Regulation of Business Regulation Chapter 15: Contracts in Writing Chapter By Richard A. Mann & Barry S. Roberts Topics Covered in this Chapter Topics I. Statute of Frauds A. Contracts Within the Statute of Frauds B. Compliance with the Statute of Frauds C. Effect of Noncompliance II. Parol Evidence Rule A. The Rule B. Situations to Which the Rule Does Not B. Apply Apply C. Supplemental Evidence III. Interpretation of Contracts Contracts within the Statute of Frauds Contracts s s s s Rule – contracts within the statute of frauds must be evidenced by a writing to be enforceable. enforceable. Suretyship Provision – applies to promises to pay the debts of others. to Executor-Administrator Provision – applies to promises to answer personally for duties of decedents. duties Marriage Provision – applies to promises made in consideration of marriage but not to mutual promises to marry. mutual Contracts within the Statute of Frauds Contracts s s s s Land Contract Provision – applies to promises to transfer any rights, privileges, powers, or immunities in real property. powers, One-Year Provision – applies to contracts that cannot be performed within one year. that Sales of Goods – applies to a contract for the sale of goods for the price of $500 or more. sale Modification or Rescission of Contracts Modification within the Statute of Frauds – oral contracts within modifying contracts are unenforceable if the resulting contract is within the statute of frauds. frauds. The Statute of Frauds The Contracts within the Statute of Frauds Exceptions Suretyship­a promise to answer for the duty of another Executor­Administrator­a promise to answer personally for debt of decedent Agreements made upon consideration of marriage Agreements for the transfer of an interest in land Agreements not to be performed within one year Sale of goods for $500 or more • Main purpose rule • Original promise • Promise made to debtor • Main purpose rule • Original promise • Promise made to debtor • Mutual promises to marry • Part performance plus detrimental reliance • Seller conveys property • Full performance by one party • Possibility of performance within one year • Admission • Specially manufactured goods • Delivery or payment and acceptance Suretyship Provision Suretyship Promise Must Be Collateral – promisor must be secondarily, not primarily, liable. primarily, s Main Purpose Doctrine – if primary object is to provide an economic benefit to the surety, then the promise is not within the statute. is s One-Year Provision One-Year The Possibility Test – if it is possible, (not necessarily likely), for the agreement to be performed within one year. year. s Computation of Time – the year runs from the time the agreement is made. from s Full Performance by One Party – makes the promise of the other party enforceable under majority view. enforceable s Sales of Goods Sales s s s Admission – admission in pleadings, testimony, or otherwise in court makes the contract enforceable for the quantity of goods admitted. admitted. Specially Manufactured Goods – an oral contract for specially manufactured goods is enforceable. enforceable. Delivery or Payment and Acceptance – validates the contract only for the goods that have been accepted or for which payment has been accepted. been Methods of Compliance s General Contract Law – the writing or writings must: writings – specify the parties to the contract – specify the subject matter and essential specify terms terms – be signed by the party to be charged or be by her agent by Sale of Goods Sale s s Writing Must – (1)­indicate that a contract has been made between the parties, (2)­be signed by the party against whom enforcement is sought or by her authorized agent, and (3)­specify the quantity of goods to be sold. to Written Confirmation – between merchants, a written confirmation that is sufficient against the sender is also sufficient against the recipient unless the recipient gives written notice of his objection within ten days. notice Effect of Noncompliance s s s s Oral Contract within Statute of Frauds – is Oral unenforceable. unenforceable. Full Performance – statute does not apply to executed contracts. to Restitution –available in quasi contract for available benefits conferred in reliance on oral contract. contract. Promissory Estoppel – oral contracts will be enforced where the party seeking enforcement has reasonably and justifiably relied on the promise and the court can avoid injustice only by enforcement. injustice Parol Evidence Rule s Statement of Rule – when parties express a contract in a writing that they intend to be the complete and final expression of their rights and duties, evidence of their prior oral or written negotiations or agreements of their contemporaneous oral agreements that vary or change the written contract are not admissible. not Parol Evidence Rule Parol Written contract? No No No No Parol Evidence Rule Does Not Apply: Evidence Is Admissible Yes Integrated contract? Yes Evidence prior or contemporaneous? Yes Evidence varies contract? Yes Evidence provides fraud, misrepresentation, undue influence, mistake, duress, incapacity, illegality, or unconscionability? Yes No Continues on next slide... Parol Evidence Rule (cont.) No Evidence of a condition precedent? Yes Yes Yes Parol Evidence Rule Does Not Apply: Evidence Is Admissible No Evidence explains an ambiguity? No Evidence of a clerical error? No Parol Evidence Rule Applies: Evidence Is Not Admissible Situations to Which the Rule Does Not Apply Situations s s s s s A contract that is not an integrated contract document. document. Correction of a typographical error. Showing that a contract was void or Showing voidable. voidable. Showing whether a condition has in Showing fact occurred. fact Showing a subsequent mutual Showing rescission or modification of the contract. contract. Supplemental Evidence Supplemental s May be admitted: – Course of Dealing – previous conduct between the parties. between – Usage of Trade – practice engaged in by the trade or industry. the – Course of Performance – conduct between the parties concerning performance of the particular contract. performance – Supplemental Consistent Evidence Rules of Interpretation of Contracts Rules s s s s All the circumstances are considered All and the principal purpose of the parties is given the greatest weight. is A writing is interpreted as a whole. Commonly accepted meanings are used Commonly unless the parties manifest a different intention. intention. Wherever possible, the intentions of the Wherever parties are interpreted as consistent with each other and with course of performance, course of dealing, or usage of trade. of Rules of Interpretation of Contracts Rules s s s s Technical terms are given their technical Technical meaning. meaning. Specific terms are given greater weight Specific than general language. than Separately negotiated terms are given Separately greater weight than standardized terms or those not separately negotiated. or The order for interpretation is: express The terms, course of performance, course of dealing, and usage of trade. dealing, Rules of Interpretation of Contracts s s s Where a term has several possible Where meanings, the term will be interpreted against the party who supplied the contract or term. contract Written provisions are given preference Written over typed or printed provisions, and typed provisions are given preference over printed provisions. over If an amount is set forth in both words If and differing figures, words control figures. figures. ...
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