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MGMT 212
Statute of Frauds (ch 15)
14
Management
Undergraduate 2
06/17/2009

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Term
Statute of Frauds
Definition
In order to be enforceable, SOME contractual promises must meet the two requirements of the Statute of Frauds: 1.) Must be in writing. 2.) Must be signed by party against whom enforcement is sought.
Term
5 Types of Contracts that must meet the statute of frauds requirements
Definition
1.) Contracts involving interests in land. 2.) The 'one-year' rule. 3.) Collateral Promises. 4.) Promises made in consideration of marriage. 5.) Contracts for the sale of goods.
Term
Contracts involving interests in land (1.)
Definition
Real property = land + anything permanently attached to it. Other interests include oil, gas, sand, gravel, mortgages, leases, easement (access rights).
Term
The "one-year" rule
Definition
Contracts that cannot by their own terms be performed within a year. If there is even the slightest possibility that performance can be completed within one year, oral contract is enforceable. Year begins to run from the DAY AFTER CONTRACT IS MADE. Even if performance actually takes longer than a year, as long as performance was possible within a year an oral contract is still enforceable.
Term
Collateral Promises
Definition
When a 3rd party guarantees the principal debtor with secondary, collateral promise to perform. Must be written down and is only enforceable if promise is made to creditor... NOT to debtor. Exception: "Main purpose rule": if main purpose of the guarantor is to protect his own interest or to secure a personal benefit, an oral promise is enforceable.
Term
estate debts (collateral promises)
Definition
A promise by an executor or administrator of the estate of a deceased person to personally pay a debt of the deceased's estate must be in writing in order to be enforceable.
Term
Promises made in consideration of marriage
Definition
Unilateral promises to pay money or give other property in exchange for promises to marry and prenuptial agreements must be IN WRITING in order to be enforceable.
Term
Contracts for the sale of goods
Definition
If amount >=$500, contract must be in writing.
Term
Exceptions to statute of frauds
Definition
1.) Partial performance. 2.) Admissions. 3.) Promissory Estoppel
Term
Partial Performance // Exception to statute of frauds (1.)
Definition
If there is partial performance by both parties, it's as if both have acknowledged that the contract exists, courts will probably enforce it.
Term
Admissions // Exception to statute of frauds (2.)
Definition
If party admits [during discovery] that contract exists.
Term
Promissory estoppel // Exception to statute of frauds (3.)
Definition
a court may use the doctrine of promissory estoppel to permit recovery under an oral contract, which would otherwise be unenforceable b/c of the statute of frauds if: 1.) the reliance was foreseeable to the party making the oral promise; and 2.) if injustice can be avoided by enforcing the promises
Term
Sufficiency of writing
Definition
1.) Memo or other writing evidencing the contract need only contain the basic, essential terms of the contract. Contract for the sale of goods must have quantity + Other contracts: parties, subject matter, consideration, and any other essential terms. Contract for sale of land must have price and description of the property. Writing must be signed by party against whome enforcement is sought
Term
Parole (oral) evidence rule
Definition
Evidence rule prohibiting any evidence at trial of the party's prior agreements or contemporanious oral agreements. This is b/c a written instrument is ordinarily regarded as the complete, integrated agreement. It's admitted to show: 1.) contracts subsequently modified. 2.) Contract was void or voidable. 3.) The meaning of ambiguous or vague language. 4.) the writing is incomplete. 5.) a prior course of dealings, course of performance, or usage in trade. 6.) the contract was subject to orally agreed-upon conditions. 7.) obvious or gross typographical or clerical errors.
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