1. BUSINESS LAW
TEXT AND CASES
Legal, Ethical, Global, and Corporate Environment
Clarkson  Miller  Cross
TWELFTH EDITION
Chapter 15 Statute of Frauds – Writing Requirement and Electronic Records

2. §1: The Origins of the Statute of Frauds
In 1677 England passed the law “An Act for the Prevention of Frauds and Abuses.”
Certain types of contracts must be in writing and signed by the party against whom enforcement is sought to be enforceable.
Today, almost every state has a Statute of Frauds.

3. §2: Contracts That Fall within The Statute of Frauds
To be enforceable, the following types of contracts must be in writing and signed:
Contracts involving Interest in Land.
Contracts involving “One-Year Rule.”
Collateral or Secondary Contracts.

4. Contracts That Fall within The Statute of Frauds
The following types of contracts must be in writing and signed (continued):
Promise Made in Consideration of Marriage.
Contracts for the Sale of Goods priced at $500 or more.

5. Contracts Involving Interests in Land
All contracts for the transfer of any interest in land: mortgages and leases.
CASE Salim v. Solaiman (2010). Do you agree that lack of an adequate property description can make the contract unenforceable?

6. The One-Year Rule
A contract that cannot, by its own terms, be performed within one year from the date it was formed.
One-year period begins to run the day after the contract is made.
Test: Whether performance is possible (although unlikely) within one year.

7. Exhibit One Year Rule

8. Collateral Promises
Secondary promise made to a third party to assume the debts and obligations of the primary debtor.

9. Collateral Promises Primary v. Secondary Obligations.
Primary contract does not need to be in writing.
Secondary contract must be in writing to be enforceable.
Exception--“Main Purpose Rule”.
Oral contract is enforceable if main purpose is benefit to guarantor.

10. Promises Made in Consideration of Marriage
Unilateral promise to make monetary payment or gift in consideration of a promise to marry must be in writing.
Same applies to prenuptial agreements.

11. Contracts for the Sale of Goods
UCC requires a writing or memorandum for the sale of goods priced at $500 or more.

12. Exceptions to Statute of Frauds
Partial Performance.
Court will grant specific performance if partially performed.
CASE School-Link Technologies, Inc. v. Applied Resources, Inc. (2007). Why would a seller rely on an oral contract?

13. Exceptions to Statute of Frauds
Admissions.
Promissory Estoppel.
Special Exceptions under the UCC.

14. Review of Contracts Subject to Statute of Frauds

15. §3: Sufficiency of the Writing
Statute of Frauds requires a ‘Written Memorandum’ (written or electronic) signed by the party against whom enforcement is sought.
What Constitutes a Writing?

16. Sufficiency of the Writing
What Must Be Contained in the Writing?
The essential terms: quantity, signed by party to be charged, names of parties, subject matter, consideration. Sales of land must state the price and description with sufficient clarity.
Faxed memo sufficient if it shows a meeting of the minds.

17. §4: The Parol Evidence Rule
Oral representations or promises made prior to the contract’s formation or at the time the contract was created, may not be admitted in court.
Exceptions. 

18. Exceptions to the Parol Evidence Rule
Contracts subsequently modified.
Voidable or Void contracts.
Contracts containing ambiguous terms.
Incomplete Contracts.
Prior dealing, course of performance, or usage of trade.

19. Exceptions to the Parol Evidence Rule
Contracts subject to orally agreed-on conditions precedent.
Contracts with an obvious or gross clerical error.
CASE Watkins v. Schexnider (2010). If you were the judge, would you have admitted the evidence?

20. The Parol Evidence Rule
What is an “Integrated Contract”?

21. §5: The Statute of Frauds in the International Context
CISG governs sales contracts. Article 11 does not incorporate statute of frauds provisions.
Relies on the accord of legal customs of most countries.