Contracts in Writing

Chapter 18Contracts in WritingCopyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Statute of Frauds (Definition):Rule of state law requiring certain types of contract to be in writing in order to be enforceable18-218-3Purposes of Statute of FraudsEase contractual negotiations by requiring sufficient, reliable evidence to prove existence and specific terms of contractPrevent unreliable, oral evidence from interfering with contractual relationshipPrevent parties from entering into contracts with which they do not agree18-4Contracts Subject to Statute of FraudsContracts that cannot be performed within one year from the date of their makingPromises made in consideration of marriage (Prenuptial agreements)Contracts to pay the debt/default of another partyReal estate contractsContracts for the sale of goods valued at $500 or more18-5Statute of Frauds Writing RequirementsCommon Law--Written contract must clearly indicate:Parties to contractSubject matter/purpose of agreementConsideration given by both partiesSignificant terms (Price, quantity, etc.)Signature of party plaintiff seeks to hold responsible under contract (i.e., signature of defendant)Uniform Commercial Code (UCC)—Written contract for sale of goods must include:Quantity of goodsSignature of defendant18-6Exceptions to Statute of Frauds Writing RequirementAdmission: Statement made in court, under oath, or at some state during a legal proceeding in which defendant admits that oral contract existed (even though contract was originally required to be in writing)Partial PerformancePromissory Estoppel: Legal enforcement of otherwise unenforceable contract, due to party’s detrimental reliance on contractMiscellaneous exceptions recognized by Uniform Commercial Code (UCC): Examples—Oral contracts between merchants, oral contracts for customized (“specially manufactured”) goodsParole Evidence Rule (Definition):Common law rule stating that oral evidence of agreement made before or contemporaneously with written agreement is inadmissible when parties intended to have written agreement be complete and final version of agreement18-7Purpose of Parole Evidence RuleLends stability, predictability and integrity to written contracts18-818-9Exceptions to Parole Evidence RuleContracts that are subsequently modifiedContracts conditioned on orally agreed-upon termsContracts that are not final, as they are part written and part oralContracts with ambiguous termsIncomplete contractsContracts with obvious typographical errorsVoid or voidable contractsEvidence of prior dealings or usage of trade18-10Integrated ContractsDefinition: Written contracts within statute of frauds intended to be complete and final representation of parties’ agreementGeneral Rule: Integrated contracts prevent admissibility of parole evidence