The Statute of Frauds Section 10.1

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 The Statute of Frauds Section 10.2 Special Rules and Formalities 10 Chapter Form of a Contract

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract What You’ll Learn How to explain the purpose of the Statute of Frauds (p. 206) How to explain the legal status of a contract that is not in writing (p. 206)

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract What You’ll Learn How to identify the elements that must be included in a written contract (p. 206) How to deal with contradictory and ambiguous terms in a written agreement (p. 207)

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract What You’ll Learn How to identify which contracts must be in writing (p. 208)

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Why It’s Important Understanding which contracts must be in writing, as well as the elements of a writing, will help you avoid pitfalls associated with the Statute of Frauds.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Legal Terms breach of contract (p. 206) perjury (p. 206) Statute of Frauds (p. 206) memorandum (p. 206) goods (p. 213) real property (p. 213)

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Purpose of a Writing Elements of a Writing Evaluating Contradictory Terms Evaluating Ambiguous Clauses Section Outline

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts That Must Be in Writing Contracts to Pay Debts of Others Contracts to Pay Debts of Deceased Persons Contracts Requiring More Than a Year to Perform Section Outline

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts That Must Be in Writing, continued Contracts in Consideration of Marriage Contracts for Sale of Goods of $500 or More Contracts to Sell Real Property Section Outline

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Pre-Learning Question Why do you think some contracts should be in writing?

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Purpose of a Writing In early England, contracts did not have to be written to be fully enforceable. Persons could be brought to trial for breach of written or oral contracts.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Purpose of a Writing A breach of contract is a wrongful failure to perform one or more promises of a contract.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Purpose of a Writing Only persons who were not parties to the contract could be witnesses in court. To protect their friends or self- interests, witnesses often made false statements under oath in court.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Purpose of a Writing Making such false statements is called perjury and is a crime.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Purpose of a Writing To discourage such practices, Parliament passed the “Act for the Prevention of Frauds and Perjuries,” which became known as the Statute of Frauds. It required certain contracts to be in writing to be enforceable.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Purpose of a Writing Most states now have a Statute of Frauds, which are state laws requiring that certain contracts be evidenced by a writing.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract What is a breach of contract?

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract ANSWER A wrongful failure to perform one or more promises of a contract.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Pre-Learning Question What elements should be present in a written contract?

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Elements of a Writing A memorandum is the written evidence of an agreement, need not be formal, and could be: a letter a sales slip an invoice a telegram words written on a check

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Elements of a Writing Elements of a writing should identify the following: PlaceDate Parties involved Subject matter

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Elements of a Writing Price and terms Intent of the parties Signature of the party who may be charged

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Evaluating Contradictory Terms If changes are made to a contract, the court will uphold the most recent terms. If handwritten changes are made to a typewritten or printed contract, the handwritten terms will prevail.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Evaluating Contradictory Terms Typewriting prevails over printing. A dollar amount written in words will prevail over the amount written in figures.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract 10.1 Contradictory Terms

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Evaluating Ambiguous Clauses When a written contract can be understood in different ways, the court will lean in favor of the party who did not draft the contract and against the one who drafted it.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Pre-Learning Question What type of contracts do you think should be in writing?

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts That Must Be in Writing Every state has a law requiring that certain kinds of contracts be in writing to be enforceable.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts to Pay Debts of Others A contract that one person makes with another to pay the debts of someone else must be in writing to be enforceable.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts to Pay Debts of Deceased Persons An executor uses property from the estate to pay off any debts. If the estate lacks the money to pay the debt, the executor may promise to pay them with his or her own money.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts to Pay Debts of Deceased Persons Such an agreement, which is actually an agreement to pay another’s debts, must be in writing to be enforceable.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts Requiring More Than a Year to Perform All contracts must be written if they cannot be performed within one year of the date they are made. The year legally begins when the contract is made, not when performance is to start.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts in Consideration of Marriage When two persons agree to marry, a written contract is not required. The promises they make to one another serve as the consideration for the contract.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts in Consideration of Marriage However, if one person agrees to marry another person in return for a third person’s promise of money or property, then the agreement must be in writing.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts for Sale of Goods of $500 or More A contract for the sale of goods for the price of $500 or more must be in writing to be enforceable.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts for Sale of Goods of $500 or More Goods consist of movable items, including specially manufactured items. Furniture, books, livestock, cultivated crops, clothing, automobiles, and personal effects of any kind are considered goods.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract For contracts requiring more than a year to perform, when does the year legally begin?

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract ANSWER When the contract is made.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Contracts to Sell Real Property Contracts for the sale of real property, which is land and anything permanently attached to it, must be in writing to be enforceable.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned 1. 1.What is the purpose of the Statute of Frauds? Section 10.1 Assessment

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned To prevent fraud and perjury Section 10.1 Assessment Answer

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned 2. 2.What is the legal status of a contract that is not is writing? Section 10.1 Assessment

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned A contract that is supposed to be in writing, but which is not, is unenforceable. Section 10.1 Assessment Answer

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned 3. 3.What are the elements that must be included in a written contract? Section 10.1 Assessment

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned Place, date, parties, subject matter, price and terms, and intent of the parties. Section 10.1 Assessment Answer

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned 4. 4.How are contradictory and ambiguous terms in a written agreement interpreted by a court? Section 10.1 Assessment

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned With contradictory terms, the court will uphold the most recent terms. The court will interpret ambiguous clauses against the person who wrote the contract. Section 10.1 Assessment Answer

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned 5. 5.What contracts must be in writing? Section 10.1 Assessment

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned Contracts to pay the debts of others and to pay the debts of deceased persons, contracts requiring more than a year to perform, and contracts in consideration of marriage. Section 10.1 Assessment Answer

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Reviewing What You Learned Contracts to sell real property and contracts for the sale of goods of $500 or more. Section 10.1 Assessment Answer

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 Assessment Critical Thinking Activity Statue of Frauds Does a writing have to be a formal document to satisfy the requirements of the Statute of Frauds?

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 Assessment Critical Thinking Activity Answer Statue of Frauds No. A writing does not have to be a formal document to satisfy the requirements of the Statutes of Frauds.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 Assessment Legal Skills in Action History of the Law Clark and Fiona believe that the Statute of Frauds was originally intended as a criminal provision designed to catch con artists who prey on innocent, unsuspecting victims.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 Assessment Legal Skills in Action History of the Law Write a report in which you explain the actual historical context in which the Statute of Frauds was first enacted in England.

Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 Assessment Legal Skills in Action Answer History of the Law Reports will vary. The original purpose of the Statute of Frauds was to discourage the practice of fraudulent statements in court by witnesses when an oral contract has not been fulfilled.

The Statute of Frauds End of Section 10.1