When Contracts Must be in Writing Statue of Frauds Marriage When consideration for a contract is the promise to marry Suretyship Promise to pay another’s debt Executor’s and Administrator’s Agreement When agree to pay personally for the decedent’s debt Interest in Land Covers mortgages, easements, leases, sales Contracts that cannot be performed within one year Generally service contracts Contracts for goods costing > $500 UCC section 2-201 demands a written contract Suretyship – Lacking Something? C agrees to lend D $1,000 if S will guarantee D's obligation to C. Following S's execution of a written guaranty, C makes the loan. Statue of Frauds Writing Requirement How much do I need? Don’t need all the terms in one single document Evidence of the essential terms of the contract can be proven through writing(s) Should be signed by the party to be charged (the party against whom enforcement is sought) Exceptions to Statue of Frauds Promissory Estoppel Promisor reasonably expected to induce action or forbearance; such action or forbearance took place; and justice demands enforcement of the contract Part Performance Induced to perform and justice demands enforcement of the contract
Example of builder starting construction on land upon encouragement Merchant’s Memo (UCC) Agreement between merchants; buyer sent confirmation of agreement shortly after agreement; seller received confirmation; and seller did not send written evidence of objection to seller within 10 days. Specially Manufactured Goods If goods are already in production and cannot be sold to another customer, then oral contract is enforced Admission in Court Proceedings Party admits to agreement in a court document, stipulation or through testimony Parol Evidence Rule Binding Integrated Agreement Written document that is the final expression of one or more terms of an agreement Impact of the Rule Discharges prior agreements to the extent that it is inconsistent with them Neither party can use written or oral statements made during negotiations to alter the meaning of the document Some Exceptions to Parol Evidence Rule Defects in the formation of the contract (such as fraud, duress, mistake or illegality) The parties’ intent regarding ambiguous terms in the contract Problems with the consideration (e.g., the consideration was never paid) A merger clause strengthens the presumption that the written document is complete and final Problems with the Contract Should the contract be respected? Illegality There are reasons courts will refuse to enforce part or all of the parties’ obligations on the grounds of illegality Statutory Violations A properly executed agreement for the purchase of heroin will not be enforced by a court Public Policy Reasons Offering to pay somebody to commit a tort The contract would likely be voided as a violation of public policy Unconscionable Agreements Absence of meaningful choice Terms unreasonably advantageous to one of the parties
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