1. 1 CHAPTER 10 1

2. 1 CHAPTER 10 2 What You Will Learn: Why It Is Important:  How to explain the purpose of the Statute of Frauds  How to explain the legal status of a contract that is not in writing  How to identify the elements that must be included in a written contract  How to deal with contradictory and ambiguous terms in a written agreement  How to identify which contracts must be writing Understanding which contract must be in writing, as well as the elements of writing, will help you avoid pitfalls associated with the Statute of Frauds

3. 1 CHAPTER 10 3 Purpose of Writing – Breach of Contract Is a wrongful failure to perform one of more promises of a contract – Perjury Is making false statements while under oath of the court – Statute of Frauds Are state laws requiring that certain contracts be in writing A written contract helps the clarify the agreement

4. 1 CHAPTER 10 4 Elements of a Writing – Memorandum Does not need to be formal – Sales slip, invoice, check – Place, date, parties involved, price and terms, and signatures

5. 1 CHAPTER 10 5 – Evaluating Contradictory Terms Hand written term contradict typed contracts Written words prevail over numbers – Evaluating Ambiguous Clauses Written contracts can be understood in different ways Courts will typically rule in favor of the party who did not write the contract

6. 1 CHAPTER 10 6 Contracts Must Be in Writing – Some states require that certain types of contracts be in writing to be enforceable – It does not eliminate the essential elements, but requires the contract to be in writing Debts of others Debts of dead Year Marriage Sales in the amount over $500 Real property

7. 1 CHAPTER 10 7 – Contracts to Pay Debts of Others Agreements for one person to pay the debts of an other must be in writing. Co-signer – Contracts to Pay Debts of Deceased Persons Agreeing to pay a dead persons debt needs to be in writing – Contracts Requiring More Than a Year to Perform Must be in writing if they cannot be performed within one year of the date they are made

8. 1 CHAPTER 10 8 – Contracts in Consideration of Marriage Marriage is a valid and binding contract Promises made to one another are the consideration Oral in nature Generally not enforceable – Either party can back out without being liable If a third person agrees to pay two other for marrying, that needs to be in writing Adopting a child from a previous marriage must be in writing as well

9. 1 CHAPTER 10 9 – Contracts of Sale of Goods of $500 or More Must be in writing if price is over $500 to be enforceable Goods are movable items – Contracts to Sell Real Property Must be in writing to be enforceable The exception is called Equitable Estoppel Also called Part performance

10. 1 CHAPTER 10 Reviewing What You Learned – What is the purpose of the Statute of Frauds? – What is the legal status of a contract that is not in writing? – What are the elements that must be included in a written contract? – How are contradictory and ambiguous terms in a written agreement interpreted by a court? – What contract must be in writing?

11. 1 CHAPTER 10 11 What You Will Learn: Why It Is Important:  How to explain the parol evidence rule  How to identify the exception to the parol evidence rule  How to explain the lest evidence rule  How to change a contractual writing By understanding the parol evidence and best evidence rules, you will know what business records to keep when you enter a contractual relationship that requires a writing

12. 1 CHAPTER 10 12 Special Rules for Written Contracts – Special rules apply to written contracts – Parol Evidence Rule Oral agreements prior to written contract are not enforceable – Parol – from the mouth – Evidence – anything presented as proof – The Best Evidence Rule Original is usually required – Copies are looked at with disfavor by the court – Duplicate originals are your copy of the original contract

13. 1 CHAPTER 10 13 Changing the Writing – Beware of the small print Read the ENTIRE contract BEFORE you sign it. If you don’t understand or agree to it, cross it out before you sign. Have the other party initial where you crossed out Don’t be afraid to make changes to a printed form. If promises were made to you, write them in. Refuse to sign if you do not agree with everything in writing. Sometimes an oral agreement is a better position. If the contract is too complicated and unclear, consider have a lawyer look at it – it may be worth the price.

14. 1 CHAPTER 10 14 Reviewing What You Learned – What is the parol evidence rule? – What are the expectation to the parol evidence rule? – What is the best evidence rule? – What rules govern the changes in a written contract?