Chapter 10 Elements of a Contract

*Some contracts are VALID but UNENFORCEABLE. CERTAIN TYPES OF ORAL CONTRACTS IN EARLY ENGLAND, ALL CONTRACTS COULD BE ORAL; THEY DID NOT HAVE TO BE WRITTEN TO BE FULLY ENFORCEABLE

Breach of contract- WRONGFUL FAILURE TO PERFORM ONE OR MORE PROMISES OF A CONTRACT THE ACUSED COULD NOT TESTIFY ON HIS OR HER OWN BEHALF. ONLY PERSONS WHO WERE NOT PARTIES TO THE CONTRACT COULD TESTIFY WITNESSES MADE FALSE STATEMENTS TO PROTECT THEIR FRIENDS

Perjury- WITNESSES MAKE FALSE STATEMENTS UNDER OATH IN COURT Statutes of Frauds (1677)- CERTAIN CONTRACTS MUST BE EVIDENCED BY A WRITING IN ORDER TO BE ENFORCEABLE A WRITING DOESN’T HAVE TO BE LONG AND FORMAL TO BE ENFORCEABLE

Memorandum- WRITTEN EVIDENCE OF AN AGREEMENT. Examples: LETTERS, SALES SLIPS, INVOICES, EMAILS, CANCELED CHECK The memorandum must include enough information to satisfy the statutes of fraud: THE PLACE THE DATE THE PARTIES SUBJECT MATTER PRICE AND TERMS INTENT SIGNATURE OF THE PARTY WHO MAY BE CHARGED

HANDWRITTEN TERMS PREVAIL OVER TYPED TYPEWRITING PREVAILS OVER PRINTING WRITTEN NUMBER PREVAILS OVER FIGURES (CHECK)

Ambiguous- CAN BE UNDERSTOOD IN DIFFERENT WAYS *Courts lean in favor of the party who DID NOT draft the contract.

Contracts That Must Be In Writing Statute of frauds- DOES NOT ELIMINATE THE ELEMENTS OF A VALID CONTRACT, IT ADDS THE REQUIREMENT OF WRITTEN EVIDENCE THAT THE CONTRACT EXISTS. Executory contracts- CONTRACTS THAT HAVE NOT BEEN FULLY PERFORMED

The types of contracts that must be in writing are: Contracts to pay the debts of others. Example: PROMISE TO PAY IF THEY DON’T PAY-CO-SIGNER ON A LOAN, PARKING TICKETS Contracts by executors and administrators of estates to pay debts of deceased persons out of their own pockets. Example: A PERSON DIES WITH 10,000 IN HIS/HER ACCOUNT. THEY OWE CREDITORS 12,000. IF THE EXECUTOR OF THE ESTATE MAKES AN ORAL AGREEMENT TO PAY THEIR DEBTS THEY ARE NOT LEGALLY OBLIGATED TO PAY THE DEBT.

Contracts requiring more than a year to perform. Example: IF AN AGREEMENT TO PERFORM A TASK THAT OBVIOUSLY REQUIRES MORE THAN ONE YEAR TO COMPLETE, THE AGREEMENT IS UNENFORCEABLE-ONE PERSON PAINTING ALL THE OFFICES IN A SKYSCRAPER Contracts in consideration of marriage. Either party can break the contract- AGREEMENT TO GET MARRIED IF ONE PERSON AGREES TO MARRY ANOTHER BECAUSE OF A MONETARY PROMISE OF A THIRD PARTY, THE AGREEMENT MUST BE IN WRITING Example: BRIDE’S MOTHER AGREES TO PAY FOR THE HONEYMOON IF THE GROOM MARRIES HER DAUGHTER

Contracts to sell real property. Real property- LAND AND ANYTHING PERMANENTLY ATTACHED TO IT PURCHASE AND SALES AGREEMENT MUST BE IN WRITING Exception- Equitable estoppel- PREVENTED FROM CLAIMING THE STATUTE OF FRAUDS WHEN OTHER PARTY CHANGES THEIR POSITION IN RELIANCE ON AN ORAL PROMISE MAKE IMPROVEMENTS ON THE PROPERTY CHANGES THEIR POSITION-MOVES

Contracts for the sale of goods costing $500 or more. Goods- MOVABLE ITEMS INCLUDING SPECIALLY MANUFACTURED ITEMS; FURNITURE, BOOKS, CLOTHING

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Parol Evidence Rule Parol Evidence Rule- EVIDENCE OF ORAL STATEMENTS MADE BEFORE SIGNING A WRITTEN AGREEMENT CANNOT BE PRESENTED IN COURT TO CHANGE OR ADD TO THE TERMS OF A WRITTEN AGREEMENT Parol- WORD OF MOUTH ORAL EVIDENCE CAN BE USED TO CLARIFY WHAT WAS WRITTEN

The Best Evidence Rule Best evidence rule- COURTS USUALLY REQUIRE THAT THE ORIGINAL COPY OF A WRITTEN AGREEMENT BE SUBMITTED INTO EVIDENCE RATHER THAN ANY SORT OF COPY THE COURT WOULD LOOK WITH DISFAVOR AT PHOTOCOPIES OR CARBON COPIES OF THE WRITTEN AGREEMENT MAKING COPIES CAN MAKE IT EASIER FOR A PARTY TO CONCEAL ANY MISLEADING ALTERATIONS TO THE ORIGINAL AGREEMENT Each party to a contract receives A duplicate original- AN ORIGINAL VERSION OF THE CONTRACT

Changing the Writing READ THE ENTIRE TEXT OF THE DOCUMENT IF YOU DON’T UNDERSTAND OR AGREE; CROSS IT OUT AND HAVE THEM INITIAL DON’T BE AFRAID TO MAKE CHANGES ON A PRINTED FORM. IF ANY PROMISES ARE MADE, WRITE THEM IN AND HAVE THEM INITIAL IF THEY WON’T CHANGE THE WRITING; WALK AWAY AND REFUSE TO SIGN IF THE CONTRACT CONTAINS A LOT OF COMPLICATED OR AMBIGUOUS LANGUAGE, CONSIDER ASKING A LAWYER TO REVIEW THE AGREEMENT BEFORE SIGNING

Assignment Page 217 #1-4 and Thinking Critically