Define
Statute of Frauds
Holds some K’s as unenforceable unless in writing
To satisfy the Statute of Frauds, a writing needs to contain:
- Reasonably identify the subject matter of the K
- Essential elements of the deal; and
- Be signed by the party asserting the SOF defense
⚠️Note: Writing does not need to be formal (e.g. correspondence will suffice) and can be done during or after K formation
When does performance satisfy the SOF?
For:
- Service K’s (full performance satisfies SOF)
- Unique or custom made goods (substantial beginning towards performance)
- Real estate K’s if buyer does 2 of the 3 following acts:
- Full or part payment of the purchase price
- Possesses the property; or
- Improves the property
What 6 types of K’s are subject to the Statute of Frauds?
- Marriage;
- Contracts that cannot be performed within a year;
- Land interests (real estate sales and leases > 1 year);
- Executor (contracts for an executor or administrator to answer for the duty of a decedent);
- Suretyship for another’s debts; and
- Contracts for the sale of goods for a price of $500 or greater
Does mutual promise to marry, without consideration, fall within the SOF?
No, only marriage promises made in consideration of marriage (e.g. prenups)
For K’s incapable of being performed within a year, when does the one-year period start?
From the date of K execution, not the date performance started
What is a key question to ask when determining whether K falls within the one-year rule?
Do the express terms of K make it impossible to be completed in one year?
If yes → SOF applies.
What happens if K is fully or partially performed before one-year is up?
Full performance: SOF no longer applies
Part performance: SOF still applies, but restitution available
Is a lifetime employment K subject to the SOF?
No, because the employee could die before the end of the year
What is suretyship and the main purpose rule?
K that promises to pay the debts of a third party
Main purpose rule: if the surety agreement is for the surety’s own economic benefit, then it does not fall within the SOF
Do indemnity agreements fall within the surety requirement of the SOF?
No
Agreements transferring real property must always satisfy the SOF.
True
When does part performance satisfy the SOF for real property contracts?
When the buyer completes 2 of the 3 following acts:
- Full or part payment of the purchase price;
- Possesses the property; or
- Improves the property
What type of land agreements are NOT governed by the SOF?
- Licenses for less than or equal to 1 year
- Mortgage assignments
- Leases for less than or equal to 1 year
Are easements and leases subject to the SOF?
Yes, unless for a length of less than or equal to 1 year
Does the SOF cover the land conveyance itself?
No, only the contract for the subsequent conveyance of the land
Will K’s tangentially related to land fall within the SOF? (e.g. building a park on a piece of land)
No, must be K for an interest in the land itself
When goods are worth $500 or more, what is needed to satisfy the SOF under the UCC?
A memorandum of the sale that includes:
- Indication that K has been made;
- Identity of the parties;
- Quantity; and
- Be signed by the party asserting the SOF defense
Under the UCC, when does the SOF not apply to goods over $500?
- Specially manufactured goods;
- Part payment;
- Receipt and acceptance; or
- Failure to respond (if both merchants)
- If no objection in writing within 10 days after receiving confirmation of the terms of K, K is enforceable without signature
- Judicial admission
When are goods considered specially manufactured in the context of the custom goods exception to the SOF?
- Specially made for the buyer;
- Not for sale to others; and
- Seller has made “either a substantial beginning of their manufacture or commitments for their procurement”
UCC § 2-201(3)(a)
Under the UCC, is quantity an essential term to satisfy the SOF?
Yes, unless:
- There is language providing a basis for measuring quantity; or
- K is an output or requirements K
What happens if the memorandum of sale contains a mistake as to the price or quantity? (UCC)
Agreement is still valid, but likely only enforceable for the quantity listed. Extrinsic evidence can be introduced to show the mistake, however.
Under the UCC, when can partial performance satisfy the SOF if K is for divisible goods?
Partial performance up to the quantity actually delivered or paid for
Under the UCC, when can partial performance satisfy the SOF if K involves indivisible goods?
Partial payment renders K fully enforceable
