1. Contracts Within and Exceptions to the Statute of Frauds
Chapter 12
LESSON 12-2
Contracts Within and Exceptions to the Statute of Frauds
GOALS
Identify those contracts which are within the statute of frauds
Describe exceptions where contracts within the statute need not be in writing to be enforced

2. WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
Chapter 12
WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
(#5) Contract for the Sale of Good for $500 or more
If parties agree to buy and sell goods for a price of $500 or more, their contract must be evidenced by a writing.
If less than $500, then it need not be in writing.
Any modification of that contract which brings the total price above $500 must be in writing and signed.

3. WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
Chapter 12
WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
(#5) Contract to Sell an Interest in Real Property
Transfers of real property or of lesser interests-such as a lease, the right to pump oil or to cut timber-must be in a properly signed writing to be enforceable.
In most states, oral leases for one year or less are enforceable.

4. WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
Chapter 12
WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
(#5) Contracts Thant Require More Than One Year to Complete
Courts will not enforce a contract that cannot be performed within one year unless there is a signed writing to prove the agreement.
The year begins at the time the contract is made, not at the time contractual performance is to begin.
So, it is not whether the agreement is actually performed within one year, but whether there is a possibility of performance within one year.

5. WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
Chapter 12
WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
(#5) Contract to pay a debt or to answer for the legal obligation of another person
Collateral promise - promise to pay a debt or default of another.
Primary promise - promise to pay another’s debt that is not conditioned upon the other person’s failure to pay.

6. WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
Chapter 12
WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
Main Purpose Rule -exception to a statute of frauds provision making a third party liable for an oral promise to pay another’s debt if the main purpose of the promise serves the promisor’s own interest.
(#5) Contract for which the consideration is marriage

7. WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
Chapter 12
WHAT CONTRACTS ARE WITHIN THE STATUTE OF FRAUDS
The Uniform Commercial Code provides exceptions to the statute of frauds. In the following cases, a writing and signature is not required: (#4 page185)
When goods are ordered to be specially manufactured and they are not suitable to be sold to others in the ordinary course of the seller’s business
When goods have been ordered and paid for and the seller has accepted payment

8. Chapter 12
Question #4 Continued
When goods have been received and accepted by the buyer
When the party against whom enforcement is sought admits during legal proceedings that the oral contract was made

9. Chapter 12
Question #6 (page 186)
Courts can enforce contracts within the statute that are not in writing if they: (#6)
Fall under the UCC exceptions for sales transactions
For real estate transactions in which the seller has delivered the deed or the buyer has made partial or full payment
Occupied the property and made substantial improvement
When a party makes an oral promise to pay another’s debt
And the main purpose of the promise serves the promisor’s own interest

10. Chapter 12
WHAT’S YOUR VERDICT?
Are they legally bound to remain partners in business until one dies?