Contracts - Statute of Frauds

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Contracts - Statute of Frauds
2014-07-16 18:01:00
Contracts Statute Frauds
Contracts - Statute of Frauds
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  1. Statute of Frauds - What needs to comply with SOF?
    • 1. Marriage —> A K made in consideration of marriage (like a prenup).
    • 2. Surety —> A K promising to guarantee the debt of another.
    • 3. One Year —> A K, that by its terms, cannot be performed within one year from its making.
    • 4. UCC —> Applies to goods contracts for a price of $500 or more.
    • 5. Real Property —> A K for the sale of an interest in real property.
    • REMEMBER ——> ( M. SOUR)
  2. Statute of Frauds - Surety Main Purpose Exception
    Rule: If the main purpose in agreeing to pay the debt of another is for the surety’s OWN economic advantage, then we are not in SOF world.
  3. Statute of Frauds - One-Year Rule
    • Rule: The one-year rule is interpreted very narrowly; the question is whether there is NO POSSIBLE WAY that the K could be performed within one year.
    • — If you have a contract that is signed, but it won’t happen till a year later, you ARE in SOF world.
  4. Statute of Frauds - Real Property Rule
    Rule: Only contracts transferring an interest in the property are in SOF world. Not ALL contracts involving real property are not in SOF world. Leases of less than one year are usually NOT in SOF world.
  5. Statute of Frauds - UCC Rule
    Rule: Goods K’s that are for a price of $500 OR MORE is in SOF world. (can be exactly $500)
  6. Statute of Frauds - Has SOF been satisfied?
    • Rule: Two main ways to satisfy SOF. Either by:
    • 1. Performance; OR
    • 2. By Writing
  7. Statute of Frauds - CL Services Contract (by performance)
    • Rule: FULL performance of a services K by either side satisfies the SOF.
    • Exception: PART performance of a services K DOES NOT satisfy the SOF.
  8. Statute of Frauds - CL Writing
    • Rule: A writing signed by the party against whom the K is asserted will satisfy the OSF
    • 1. Only the signature of the party against whom the K is asserted. (don’t need both signatures)
    • 2. No formal K needed. Only need the following:
    • a. Facts indicating that a K has been made;
    • b. Facts identifying the parties; and
    • c. Facts containing the ESSENTIAL elements of the deal.
  9. Statute of Frauds - CL Real Estate
    • Rule: Real estate dealers are like other service deals in that a signed writing will satisfy the SOF.
    • Exception: Unlike service deals, PART PERFORMANCE of a real estate K CAN satisfy the SOF if any of the two of the following three elements are met:
    • a. Possession
    • b. Payment
    • c. Improvements to the land
  10. Statute of Frauds - UCC Goods (A Writing)
    • Rule: A signed writing will satisfy the SOF. But different requirements than CL. Same requirements as CL, BUT NO NEED TO MENTION PRICE.
    • — K only enforceable under the SOF for the QUANTITY MENTIONED.
  11. Statute of Frauds - UCC Goods (Part Performance Exception)
    Rule: PART PERFORMANCE on a goods K satisfies the SOF, but ONLY for the QUANTITY delivered or accepted.
  12. Statute of Frauds - UCC Goods (Custom Goods Exception)
    Rule: CUSTOM-MADE (or specially manufactured) goods are EXEMPTED from the SOF. Thus a maker can satisfy the SOF as soon as it makes a SUBSTANTIAL BEGINNING toward the manufacturing of the goods.
  13. Statute of Frauds - UCC Goods (Judicial Admission Exception)
    Rule: A statement in a pleading or during testimony (i.e. someone admits there was a K while testifying), satisfies the SOF under the UCC.
  14. Statute of Frauds - UCC Goods (Failure to Object Exception)
    Rule: The failure to object to a confirming memo within 10 DAYS will satisfy the SOF—BUT only if the BOTH PARTIES are MERCHANTS.
  15. Statute of Frauds - Equal Dignity Rule
    Rule: You need a signed writing to authorize an agent to form a K that is in the SOF world.
  16. Statute of Frauds - Modification
    • Rule: If you modify a deal that was originally in the SOF world, the modification DOES NOT AUTOMATICALLY need to satisfy the SOF requirements.
    • 1. If the modified deal would be in the SOF world, then SOF requirements must be met.
    • 2. If the modified deal would NOT be in the SOF world, then NO SOF requirements, even though the initial deal was in SOF world.