CHAPTER 16 by mh6bF4


									Chapter 16 - Writing

                                                                                 CHAPTER 16
1. There is no general requirement that contracts be in writing and in most cases, an oral contract
is enforceable. It’s best, however, to have a writing reflect all of the parties’ intentions, so you
can more easily evidence the agreement in the event a dispute arises. Without a written contract,
parties may have to rely on their verbal testimony or verbal testimony of witnesses, leaving
decisions as to credibility or the existence of a contract to a judge.

2. What is the statute of frauds? Describe its purpose and applicability. What happens if the
statute of frauds requires a certain type of contract to be in writing, and the parties to a contract
normally covered by the statute of frauds have failed to reduce their agreement to writing?

3. Define collateral contract. Why must a collateral contract be in writing?

4. Under what circumstances does the Restatement (Second) of Contracts suggest that a contract
for the transfer of an interest in land need not be in writing? What concept does this bring to

5. Keep in mind that a bilateral contract is formed when a promise is exchanged for a promise.
Those promises may be exchanged well before the time for actual performance begins, which
may make the contract impossible to be performed within a year. If the contract cannot be
performed within a year, the Statute of Frauds requires that it be in writing.

6. Specific performance is an equitable remedy whereby a court orders the breaching party to
perform his contractual obligations. It is generally available only in contracts involving the
transfer of an interest in land.

7. The writing requirement triggered by the Statute of Frauds does not mean there must be a
complete contract in all cases. The Statute can be satisfied by a writing, such as a letter, or a
series of writings tacked together that indicate the essential terms of the transaction. In addition,
if a party to a contract raises the Statute of Frauds as a defense, the Statute’s requirements will be
satisfied if that party has signed a writing or memorandum that confirms the essential terms of
the transaction.

8. It is important to remember to include all of the material terms of your agreement in the
contract. Failure to include a term could result in that term not being enforceable under the parol
evidence rule. It is often wise to include a merger clause in your contract to ensure that terms not
expressly included in the written contract will not be admissible in a dispute over the contract.

9. There are many exceptions to the parol evidence rule--give an example of an ambiguous term
in a contract and evidence that might be introduced to explain the meaning of the ambiguous

Chapter 16 - Writing


10. Does application of the concept of promissory estoppel circumvent the statute of frauds?
Why or why not. Should courts allow proof of promissory estoppel to validate otherwise
unenforceable contracts?


I. Learning Objectives

II. The Significance of Writing in Contract Law
        A. Purposes of Writing
                1. Describe several reasons why a contract should be in writing.
        B. Writing and Contract Enforcement

III. Overview of the Statute of Frauds
        A. History and Purposes
        B. Effect of Violation of the Statute of Frauds

IV. Contracts Covered by the Statute of Frauds: The following types of contracts are within
(covered by) the statute of frauds:
       A. Collateral Contracts
               1. Exception: Main Purpose or Leading Object Rule
                       a. Example: Dynegy, Inc. v. Yates, 2011 Tex. App. LEXIS 1272 (Tex. Ct.
                       App. 2011)
       B. Interest in Land
               1. Exception: Full Performance by the Vendor
               2. Exception: Part Performance (Action in Reliance) by the Vendee
       C. Contracts that Cannot be Performed within One Year
               1.Computing time
               2. Example: Schaadt v. St. Jude Medical S.C., Inc., 2007 U.S. Dist. LEXIS
               59586 (U.S. Dist. Ct. D. Minn. 2007)
       D. Sale of Goods for $500 or More
               1. Modifications of Existing Sales Contracts
       E. Promise of Executor or Administrator to Pay a Decedent's Debt Personally
       F. Contract in Which Marriage Is the Consideration

V. Meeting the Requirements of the Statute of Frauds
      A. Nature of the Writing Required
              1. Most states only require a memorandum of the parties’ agreement; not all terms
              need to be included in the writing.
                     a. Contents of the Memorandum

Chapter 16 - Writing

                       b. Contents of Memorandum under the UCC
                       c. Signature Requirement
                               (1) E-Signatures and the Statute of Frauds (Cyberlaw in Action)
                       d. Memorandum Consisting of Several Writings
        B. UCC: Alternative Means of Satisfying the Statute of Frauds in Sale of Goods
               1. A contract for the sale of goods for $500 or more for which there is no written
               memorandum signed by the party to be charged can meet the requirements of the
               statute of frauds in any of the following ways:
                       a. Confirmatory memorandum between merchants
                       b. Part payment or part delivery
                       c. Admissions in pleadings or court
                       d. Specially manufactured goods
                               (1) Example: Green Garden Packaging Co., Inc. v. Schoenmann
                               Produce Company, Inc., 2010 Tex. App. LEXIS 8887 (Tex. Ct.
                               App. 2010)
        C. Promissory Estoppel and the Statute of Frauds

VI. The Parol Evidence Rule
        A. Explanation of the Rule
                1. Parol evidence means written or spoken statements that are not contained in the
                written contract.
                2. The parol evidence rule provides that when parties enter a written contract that
                they intend as a complete integration (a complete and final statement of their
                agreement), a court will not permit the use of evidence of prior or
                contemporaneous statements that add to, alter, or contradict the terms of the
                written contract.
        B. Scope of the Parol Evidence Rule
        C. Admissible Parol Evidence
                1. Additional terms in partially integrated contracts
                        a. Example: Hinkel v. Sataria Distribution & Packaging, 920 N.E.2d 766
                        (Ind. App. 2010)
                        b. Does the contract contain a merger clause (integration clause)
                2. Explaining ambiguities
                3. Circumstances invalidating contract
                4. Existence of condition
                5. Subsequent agreements
VI. Interpretation of Contracts
        A. Parties’ principal objective test


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