Statute of frauds

Statute of Frauds
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Unformatted text preview: STATUTE OF FRAUDS AND EQUITABLE EXCEPTIONS From Chapter 14 of Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues, 7/e. Henry Cheeseman. Copyright 2010 by Pearson Prentice Hall. All rights reserved. 231 STATUTE OF FRAUDS AND EQUITABLE EXCEPTIONS CHAPTER OBJECTIVES After studying this chapter, you should be able to: 1. List the contracts that must be in writing under the Statute of Frauds. 2. Explain the effect of noncompliance with the Statute of Frauds. 3. Describe how the Statute of Frauds is applicable to the sale of goods. 4. Describe the formality of the writing of contracts and the parol evidence rule. 5. Apply the equity doctrines of part performance and promissory estoppel . CHAPTER CONTENTS INTRODUCTION TO STATUTE OF FRAUDS AND EQUITABLE EXCEPTIONS STATUTE OF FRAUDS Case 1 Sawyer v. Mills Case 2 Page v. Gulf Coast Motors EQUITY: PART PERFORMANCE Ethics Spotlight Equity: Part Performance FORMALITY OF THE WRITING PAROL EVIDENCE RULE EQUITY: PROMISSORY ESTOPPEL Contract Signing Even written contracts can be subject to interpretation. Roger Dixon Dorling Kindersley 232 S TATUTE OF F RAUDS AND E QUITABLE E XCEPTIONS Statute of Frauds A state statute that requires certain types of contracts to be in writing. Statute of Frauds: That unfortunate statute, the misguided application of which has been the cause of so many frauds. Bacon, Viscount Morgan v. Worthington (1878) INTRODUCTION TO STATUTE OF FRAUDS AND EQUITABLE EXCEPTIONS Certain types of contracts must be in writing pursuant to the Statute of Frauds. Other issues regarding the form of a contract may arise, such as the form of signature that is required on a written contract, whether a contract can be created by the integration of sev- eral documents, whether any previous oral or written agreements between the parties can be given effect, and how contract language should be interpreted. Also, there are several equitable exceptions to the Statute of Fraudsnamely the part performance exception and the doctrine of promissory estoppel. Issues regarding the Statute of Frauds, the formality of the writing of contracts and equi- table doctrines that allow exceptions to the Statute of Frauds are discussed in this chapter. STATUTE OF FRAUDS In 1677, the English Parliament enacted a statute called An Act for the Prevention of Frauds and Perjuries. This act required that certain types of contracts had to be in writing and signed by the party against whom enforcement was sought. Today, every U.S. state has enacted a Statute of Frauds that requires certain types of contracts to be in writing . This statute is intended to ensure that the terms of important contracts are not forgotten, mis- understood, or fabricated. One court stated about the Statute of Frauds, It is the purpose of the Statute of Frauds to suppress fraud, i.e., cooked-up claims of agreement, sometimes fathered by wish, sometimes imagined in the light of subsequent events, and sometimes...
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