Problem 100 • Bea Potter was hired by MacGregor Agricultural Enterprises as a bookkeeper for a two-year period; her salary was to be $34,000 a year. The contract was oral. After she had worked for a two-month period, she was wrongfully accused of stealing and was fired on the spot. When Potter brought suit, MacGregor defended on the basis of the lack of a writing. If this defense is successful, may she nonetheless recover for the two months she worked? Under what theory? How would her damages be measured? Wagers v. AMI Issues Presented 1. Whether plaintiff ’s unilaterally executed earnest money agreement, together with the letters exchanged between the parties’ respective attorneys, constitute a sufficient writing of a sale of land to satisfy the statute of frauds? 2. Whether plaintiff ’s arrangement of financing for development of the subject of the sale constituted sufficient part performance to make the sale an exception to the statute of frauds. Wagers v. AMI Issues Presented Preliminary Qustions • Why is this contract subject to the Statute of Frauds? • Do the letters together with the unilaterally signed earnest money agreemen tsatisfy the statute? Wagers v. AMI Issues Presented What is the part performance exception? Wagers v. AMI Issues Presented What is the part performance exception? “Part performance is a recognized exception of the requirement of the statute of frauds. One of the requirements of the doctrine of part performance is that the acts relied upon as constituting part performance must unmistakably point to the existence of the claimed agreement.” Wagers v. AMI Issues Presented How is this applied to real estate cases? Wagers v. AMI Issues Presented How is this applied to real estate cases? “The principal elements or circumstances involved in determining whether there has been sufficient part performance by a purchaser of real estate under an oral contract otherwise within the statute of frauds, are (1) delivery and assumption of actual and exclusive possession of the land; (2) payment or tender of the consideration, whether in money, other property, or services; and (3) the making of permanent, substantial, and valuable improvements, referable to the contract.” Wagers v. AMI Issues Presented What part performance is alegeded here? Wagers v. AMI Issues Presented What part performance is alegeded here? Arranging Financing § 139. Enforcement By Virtue Of Action In Reliance (1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the promise. The remedy granted for breach is to be limited as justice requires. (2) In determining whether injustice can be avoided only by enforcement of the promise, the following circumstances are significant: (a) the availability and adequacy of other remedies, particularly cancellation and restitution; (b) the definite and substantial character of the action or forbearance in relation to the remedy sought; (c) the extent to which the action or forbearance corroborates evidence of the making and terms of the promise, or the making and terms are otherwise established by clear and convincing evidence; (d) the reasonableness of the action or forbearance; (e) the extent to which the action or forbearance was foreseeable by the promisor. Problem 101 Mary’s Used Cars orally agreed to sell Harry a 1978 Special Corvette Pace Car for $4,000. Harry made a $300 down payment. When Harry went to pick up the car, he was told there was no contract because of the lack of a writing. When Harry pointed to UCC §2-201(3)(c), Mary’s manager just laughed and offered to give him a bumper worth $300. Who wins? If he had paid by a check, would the check itself have satisfied the writing requirement (Mary’s Used Cars would have indorsed it when it was cashed)? § 2-201. Formal Requirements; Statute of Frauds. (1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing. (3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable (a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or (b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or (c) with respect to goods for which payment has been made and accepted or which have been received and accepted Problem 102 Scarlett decided to sell Tara, her ancestral home, to Rhett, and they entered into an oral contract that specified all of the details. At the closing she decided at the last moment that she just couldn’t bear to go through with the deal, so she refused to sign the contract that he had had prepared. When he sued, she defended on the basis of the statute of frauds, Problem 102 although she took the witness stand and when shown the copy of the contract that she had refused to sign she readily admitted that it correctly reflected all of the terms of their oral agreement. As the judge, how would you rule on the statute of frauds issue? Was it unethical to plead the statute in such a case? Problem 103 Artist Basil Hallward orally agreed to sell his five finest paintings at the rate of one a year for the next five years to Henry Wotton. The price was to be $10,000 for each painting. When the time came for delivery of the first painting, Basil couldn’t bring himself to part with it. When Henry sued, Basil admitted the contract from the witness stand. Problem 103 Henry’s attorney argued that this admission destroyed Basil’s statute of frauds defense, but the other side pointed out that the contract could not be performed within one year and therefore the common law statute of frauds required a writing even if the UCC did not. How should this come out? Thomson v. Goodrich • Why is contract subject to Statute of Frauds? • What exceptions are at issue? (2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received. Thomson v. Goodrich • Does an un-objected to confirmation mean a contract exists? Thomson v. Goodrich • Does an un-objected to confirmation mean a contract exists? “The sender must still persuade the trier of fact that a contract was in fact made orally, to which the written confirmation applies.” Thomson v. Goodrich • What element in 2-201(2) is in issue? Thomson v. Goodrich • What element in 2-201(2) is in issue? • “and the party receiving it has reason to know its contents,” Thomson v. Goodrich • What element in 2-201(2) is in issue? • “and the party receiving it has reason to know its contents,” • How does Goodrich interpret this prong? Thomson v. Goodrich • What element in 2-201(2) is in issue? • “and the party receiving it has reason to know its contents,” • How does Goodrich interpret this prong? • It must be received by a particular person “at Goodrich who had reason to know its contents.” Problem 104 Despard Murgatroyd, knowing the reputation that the Oakapple Farms had for slow responses, sent a letter to the Farms stating the terms of a mythical phone conversation between the two parties in which Oakapple Farms had supposedly agreed to sell all of its 2001 crop to Despard. The letter was received by Oakapple Farms on the first of December 2012, and on February 8, 2013, the sales manager sent back a letter to Despard informing him that no such deal existed. Despard filed suit, pointing to UCC §2-201(2). Problem 104 If there really had been an oral deal, but the letter did not correctly reflect its terms, could that still be an issue in the resulting lawsuit? Problem 105 When Charles Baskerville decided to sell his house, the buyer was lawyer John Watson. The parties orally agreed to the terms but never signed a writing. If Watson backs out of the deal, is the need for a writing excused where (a) Watson told Baskerville that no writing was required for the validity of this sale? Would your answer change if Watson were not a lawyer? Problem 105 (b) Baskerville signed the writing and mailed it to Watson, who phoned Baskerville and told him he had signed it? In fact, Watson never got around to actually putting pen to paper. (c) Watson told Baskerville that they ought to sign a writing but added, ‘‘Never mind about these legal technicalities. I promise never to raise this issue’’? • What is the difference between R 139 (Promissory Estoppel) and being estopped from pleading the statute due to misrepresentations about a writing?
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