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Contracts--Statute of Frauds & Parol Evidence Rule

Contracts--Statute of Frauds & Parol Evidence Rule. “Statute of Frauds” (S/F) What is it & how did it get its name? Some of the types of contracts that must be in writing

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Contracts--Statute of Frauds & Parol Evidence Rule

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  1. Contracts--Statute of Frauds & Parol Evidence Rule • “Statute of Frauds” (S/F) • What is it & how did it get its name? • Some of the types of contracts that must be in writing • Contract for the transfer of any interest in real estate (incl. a lease for more than one year; also includes things like mortgages, easements, transfers of fractional interests, mineral interest, and so on) • Contract that, according to its specific terms, can’t possibly be performed within one year from the time the contract was made. • Contract for the sale of goods for a price of $500 or more (UCC 2-201). • Contract for the lease of goods for $1,000 or more (e.g., rentals of equipment, vehicles, etc.) (cont. on next slide)

  2. Statute of Frauds, cont. • Contract for the sale of securities (e.g., stocks, bonds, etc.) regardless of amount • Contract in which part of the consideration is a promise of marriage (archaic, but still has application to pre-nuptial agreements) • Contract to pay the debt of another • There are a few others. E.g., a “security agreement,” which is an agreement in which a debtor puts tangible or intangible personal property (any property other than real estate)

  3. Statute of Frauds, cont. • Like the concepts in Illegal Contracts & Reality of Consent, the S/F is a merely a defense to a breach of an unperformed contract • Why there are so many exceptions & the rationale for them • Recall “Promissory Estoppel” from reading in Chp. 13 on consideration—very similar (or identical) concept creates many of the exceptions to the S/F • I didn’t have time to cover Promissory Estoppel in the short time we spent on Consideration, but go back an study it closely.

  4. Statute of Frauds, cont. • Castillo v. Rios • Facts • Why was the contract “within the Statute of Frauds”? • Exception to requirement of document in the case of real estate • (1) • (2) • (3) • What facts convinced the court that the requirements were met? • Does the “part performance” exception for real estate contracts require more than it does for other contracts within the S/F? • Is it sort of “Promissory Estoppel Plus”?

  5. Statute of Frauds, cont. • Harmon v. Tanner Motor Tours of Nev., p. 378 • Facts • What caused this agreement to be within the S/F? • What created the exception to the requirement of documentation in this particular case? • What was it about the law in Nevada that was different than in most states? • Also, note that the remedy in this case was a decree (court order) of “specific performance.” What does this mean? Why did the court grant it, rather than just award $$ damages?

  6. Statute of Frauds, cont. • Shattuck v. Klotzbach, p. 383 (Lots of imp. stuff here) • Facts • Why was the contract within the S/F? • What were the documents? • When will a court treat multiple documents as a single unit for the purpose of satisfying the documentation requirement? • What about the content of the document(s)? What has to be in the written document? • Common law (with a little extra for real estate agreements) • UCC (sale of goods for $500 or more, lease of goods for $1,000 or more, or sale of securities) • Whose signature must be on a document (or multiple documents treated as one) to fulfill the S/F requirement? • What form did the required signature take in this case?

  7. Statute of Frauds, cont. • Two other important variations in the S/F for contracts covered by the UCC (in addition to relaxed content requirements) • No general “part performance” exception, but 3 very specific exceptions in UCC 2-201(3) (study closely) • (1) • (2) • (3) • “Third way” of fulfilling documentation requirement (UCC 2.201(2) (study closely) • The critical thing is that under certain circumstances, a plaintiff can use a document against a defendant to fulfill the requirement of documentation even without the defendant’s signature. • (1) • (2) • (3)

  8. Parol Evidence Rule—Very Imp. • The basic premise • What is the first condition for the rule to apply? • How you can take care of this in the document itself • What, exactly, does the rule say? • Ex: • “Exceptions” (actually, these are just situations in which the rule does not apply, rather than being exceptions) • (1) Ambiguity • (2) Typos • (3) Mistake, fraud, duress, unconscionability, etc. • (4) “Condition precedent”—shows that obligations didn’t come into existence • (5) Modifications

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