Ch. 3.A.Statute of Frauds1

 Origin: English Statute of Frauds in 1677  Today: Statutes, with variations, continue in U.S. states  Why require a writing?  Should a writing be required for all contracts?  Are there any disadvantages to the requirement? Ch. 3.A.Statute of Frauds2

1. SCOPE: Is the contract within the statute? If yes, then go to step 2. If no, then stop. 2. SATISFACTION: If the contract is within the statute, has the statute been satisfied? 1. If yes, then stop. 2. If no, then go to step EXCEPTION: If the statute has not been satisfied, do other facts prevent application?  If yes, then stop.  If no, then go to step EFFECT: If statute is not satisfied and there is no exception, is party seeking to enforce contract?  If yes, contract is UNENFORCEABLE.  If no, then Statute does not apply. Ch. 3.A.Statute of Frauds3

 Original categories (Rest. (2d) §110) 1. Executor-administrator 2. Suretyship 3. Marriage 4. Land Interests 5. One-Year  UCC 2-201: $500 or more ($5000 in amended version) Ch. 3.A.Statute of Frauds4

 Promisor is a surety if 1. makes a promise to creditor 2. to do that which will discharge debtor’s duty 3. S makes the promise for debor’s benefit and not primarily for own benefit.  Executorship provision is interpreted the same way.  Surety does not include novation (Rest. 115) or indemnification (insurance). Ch. 3.A.Statute of Frauds5

 An “interest in land” depends on property law. Rest. (2d) defines as “any right, privilege, power or immunity… which is an interest in land under property law.” Ch. 3.A.Statute of Frauds6

 UCC §2-201 covers contracts for sales over $500.  Some states have adopted a proposed increase to $5,000 threshold. Ch. 3.A.Statute of Frauds7

 K is only within 1-year clause if BY ITS TERMS it is not to be performed within 1 year of its making.  How does Klewin court interpret this rule?  How does this contrast with McInerney court’s position?  Which approach is better? Ch. 3.A.Statute of Frauds8

 Who must sign?  What exception does the UCC create to this rule?  What must the writing reflect?  What is the issue in Bazak International? How does the court resolve it?  What term(s) must be included in the writing?  How does the Crabtree court find a sufficient writing to satisfy the statute? Ch. 3.A.Statute of Frauds9

 Rest. (2d) categories  Full performance by one side in 1-year K (130(2))  Protected reliance due to part performance (139; Chomickey)  UCC 2-201(3) 1. Special-order goods started or commitment to procure 2. Admission in pleading or testimony 3. Goods 1.for which payment has been made and accepted, or 2.that have been received and accepted. ▪ NOTE: Performance (partial or complete) validates performed portion of contract only. Ch. 3.A.Statute of Frauds10

 Noncompliance prevents enforcement of contract, but does not void contract.  It can still be used as evidence of something else.  SOF defense can be waived  intentionally (e.g., fail to raise in pleadings)  by admissions in legal filings or sworn testimony.  Charged party may be equitably estopped from asserting defense if the party represented  I will prepare a writing.  A writings has already been prepared.  No writing is necessary. Ch. 3.A.Statute of Frauds11