30 terms

Law-14-Statute of Frauds and Equitable Exceptions

Law-14-Statute of Frauds and Equitable Exceptions
statute of frauds
state statute that requires certain types of contracts to be in writing
-interests in real property
-on their own terms cannot possibly be performed within one year
-collateral contracts in which a person promises to answer for the debt or duty of another
-promises made in consideration of marriage
-contracts for the sale of foods for $500 or more
-contracts for the lease of goods with payments of $1000 or more
-real estate agents' contracts
-agents contracts where the underlying contracts must be in writing
-promises to write a will
-contracts to pay debts barred by the statute of limitations or discharged in bankruptcy
-contracts to pay compensation for services rendered in negotiating the purchase of a business
-finder's fee contracts
12 types of contracts that must be in writing according to the statute of frauds:
unenforceable by either party
executory contract not in writing even though the Statute of Frauds requires it to be is...
real property
land itself, as well as buildings, trees, soil, minerals, timber, plants, crops, fixtures and other thigns permanently affixed to the land or buildings
interest in real property given to a lender as security for the repayment of a loan
transfer of the right to use real property for a specified period of time
life estate
interest in real property for a person's lifetime; upon that person's death, the interest will be transferred to another party
right to use someone else's land without owning it or leasing it
one-year rule
rule which states that an executory contract that cannot be performed by its own terms withing one year of its formation must be in writing
guaranty contract
promise in which one person agrees to answer for the debts or duties of another person; it is a contract between the guarantor and the original creditor
in a guaranty situation, there are ___ parties and ____ contracts
guaranty situation: first contract
(original contract; primary contract) between debtor and creditor; does not have to be in writing
guaranty situation: second contract
(guaranty contract) between the person who agrees to pay the debt if the primary debtor does not and the original creditor
person who agrees to pay a debt if the primary debtor does not
main purpose exception
exception to the statute of frauds which states that if the main purpose of a transaction and an oral collateral contract is to provide pecuniary benefit to the guarantor, the collateral contract does not have to be in writing to enforced. (also known as the leading object exception)
UCC Statute of Frauds Section 2-201 (1)
section of the Uniform commercial code which states that sales contracts for the sale of goods costing $500 or more must be in writing (recently updated to $5000 or more, if adopted by state)
UCC Statute of Frauds Section 2A-201 (1)
section of the Uniform Commercial code which states that lease contracts involving payments of $1000 or more must be in writing
equal dignity rule
rule which says that agents' contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable
part performance
an equitable doctrine that allows the court to order an oral contract for the sale of land or transfer of another interest in real property to be specifically performed if it has been partially performed and performance is necessary to avoid injustice
contracts must be signed by the party against who enforcement is sought; the other party's signature is not required; can make contracts enforceable against one party but not the other
integration of several writings
combination of several writings to from a single contract
incorporation by referenced
integration made by express reference in one document that refers to and incorporates another document within it
implied integration
placing several documents in teh same container so that they are part of the same contract, but they don't necessarily refer to each other
-ordinary words are given their usual meaning according to dictionary
-technical words are given their technical meaning unless a different meaning is clearly intended
-specific terms are presumed to qualify general terms
-if both parties are members of the same trade or profession, words will be given their meaning as used in trade, unless contract indicates otherwise
-typed words in a contract prevail over preprinted words; handwritten words prevail over both preprinted and typed words
-ambiguity will be resolved against the party who drafted the contract
standard of interpretation
parol evidence
oral or written words outside the four corners of a written contract
parol evidence rule
rule that says if a written contract is a complete and final statement of the parties' agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract. There are several exceptions to this rule.
merger clause
clause in a contract that stipulates that it is a complete integration and the exclusive expression of the parties' agreement; also known as an integration clause
-shows that a contract is void or voidable
-explains ambiguous language
-concerns a prior course of dealing or course of performance between the parties or a usage of trade
-fills in teh gaps in a contract
-corrects an obvious clerical or typographical error; court can reform the contract to reflect the correction
5 exceptions to parol evidence rule:
promissory estoppel
equitable doctrine that permits enforcement of oral contracts that should have been in writing; it is applied to avoid injustice; (equitable estoppel)
-promise induces action or forbearance of action by another
-reliance on the oral promise was foreseeable
-injustice can be avoided by enforcing the oral promise
3 conditions for oral promise to be enforceable: