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Quote of the Day “A verbal contract isn’t worth the paper it’s written on.” Samuel Goldwyn, Hollywood producer
The Statute of Frauds Many agreements are unenforceable, unless it, or some memorandum of it, is in writing and signed. These include: For any interest in land That cannot be performed within one year To pay the debt of another Made by an executor of an estate Made in consideration of marriage; and For the sale of goods over $500 Once a contract is fully executed, it makes no difference that it was unwritten.
Agreement for Interest in Land A contract for interest in land must be in writing to be enforceable. Exception: Full Performance by the Seller Exception: Part Performance by the Buyer –the buyer of land may be able to enforce an oral contract if she paid part of the price and either entered the land or made improvements to it. Exception: Promissory Estoppel –If a promisor makes an oral promise that should reasonably cause the promisee to rely on it, and the promisee does rely, the promisee may be able to enforce the promise.
Agreements That Cannot Be Performed Within One Year Unenforceable unless in writing. When one person agrees to pay the debt of another as a favor to that debtor, it is called a collateral promise. Promise to Pay Debt of Another
Promise Made by and Executor of an Estate An executor’s promise to use her own funds to pay a debt of the deceased must be in writing to be enforceable. Promise Made in Consideration of Marriage Unenforceable unless in writing.
What the Writing Must Contain The contract or memorandum must be signed by the defendant, and It must state with reasonable certainty: the name of each party the subject matter of the agreement, and all of the essential terms and promises. Click here to go to the internet for samples of written contracts.
Sale of Goods -- UCC §2-201(1) - The Basic Rule A contract for sale of goods worth more than $500 is not enforceable unless there is some writing, signed by the defendant, indicating that the parties reached an agreement. Click to read the Uniform Commercial Code on the internet.
Sale of Goods -- UCC §2-201(2) - Merchants’ Exception Within a reasonable time of making an oral contract, if one merchant sends a written confirmation to the other, and the confirmation is definite enough to bind the sender herself, then the merchant who receives the confirmation will also be bound by it unless he objects in writing within 10 days.
Sale of Goods -- UCC §2-201(3) - Special Circumstances An oral contract may be enforceable, even without a written memorandum, if: The seller is specially manufacturing the goods for the buyer, or The defendant admits in court proceedings that there was a contract, or The goods have been delivered or they have been paid for.
Parol Evidence Parol evidence refers to anything (apart from the written contract itself) that was said, done, or written before the parties signed the agreement or as they signed it.
The Parol Evidence Rule When two parties make an integrated contract, neither one may use parol evidence to contradict, vary, or add to its terms. Exception: Incomplete or Ambiguous –If a court determines that a written contract is incomplete or ambiguous, it will permit parol evidence. Exception: Misrepresentation or Duress –A court will permit parol evidence of misrepresentation or duress.
“The parties to disputes very often could have avoided litigation with a few carefully crafted sentences. It is worth the time and effort to write them.” “The parties to disputes very often could have avoided litigation with a few carefully crafted sentences. It is worth the time and effort to write them.”
Link to the Internet Clicking on the orange button below will link you the website for this book. (You must first have an active link to the internet on this computer.) Once there, click: Online Study Guide, then Your choice of a chapter, then Practice, then Internet Applications. You should then see web links related to that chapter. Click above to return to the slide show. Click Here!