Contracts Lecture Eleven: The Statute of Frauds

These sources collectively explain the Statute of Frauds, a legal principle originating in English law that mandates certain types of contracts be in writing and signed to be enforceable, primarily to prevent fraud and misunderstandings. Key contract categories falling under this statute include agreements for real estate interests, those impossible to perform within one year, promises to pay another's debt (suretyship), contracts made in consideration of marriage, and, under the Uniform Commercial Code (UCC), sales of goods valued at $500 or more. While the statute generally requires a written memorandum identifying the subject matter, essential terms, and signed by the party to be charged, exceptions like partial performance (especially in land contracts), promissory estoppel (detrimental reliance), and admissions in court exist to prevent injustice. Modern legal developments, including the E-SIGN Act and UETA, acknowledge the validity of electronic signatures and communications in satisfying these writing requirements.

What is the primary purpose of the Statute of Frauds? The primary purpose of the Statute of Frauds is to prevent fraud and perjury by requiring certain significant contracts to be evidenced by a writing. This ensures that serious agreements are properly documented, reducing the likelihood of false claims or misunderstandings about whether a contract was formed.

Name and briefly describe two categories of contracts that fall under the common law Statute of Frauds. Two categories are contracts for the sale of land and contracts that cannot be performed within one year. Contracts for the sale of land include interests like mortgages, leases over a year, and easements. The one-year rule applies to agreements objectively impossible to complete within a year from their making.

Explain the "one-year rule" as it applies to the Statute of Frauds. What is the key test courts use for this rule? The "one-year rule" states that contracts that cannot be fully performed within one year from their making must be in writing. The key test courts use is the "possibility test," meaning if there's even the slightest theoretical possibility the contract could be completed within a year, it falls outside the statute and doesn't require a writing.

Under the UCC, what is the monetary threshold for contracts for the sale of goods to fall within the Statute of Frauds? Under the Uniform Commercial Code (UCC), contracts for the sale of goods must be evidenced by a writing if the price of the goods is $500 or more. Oral agreements for goods valued at less than $500 are generally enforceable without exception.

Describe the "part performance" doctrine as an exception to the Statute of Frauds for land contracts. The "part performance" doctrine allows for the enforcement of an oral contract for the sale of land despite the lack of a writing. This exception applies if the buyer has taken possession of the property, made significant improvements, or paid a substantial part of the purchase price, showing clear reliance on the oral agreement.

What does it mean for a contract to be "unenforceable" due to the Statute of Frauds, as opposed to "void"? An "unenforceable" contract means that it cannot be proven or enforced in a court of law if the statute is raised as a defense, but it is not inherently invalid or "void." The underlying agreement still exists, but the legal system won't compel its performance due to the lack of required formalities.

How can an email potentially satisfy the "writing" and "signature" requirements of the Statute of Frauds? An email can satisfy these requirements if it identifies the subject matter and essential terms, and if it contains an electronic signature or symbol (like a typed name, letterhead, or even an authenticated email address) that demonstrates the sender's intent to authenticate or sign the record. Modern acts like ESign confirm the validity of electronic signatures.

Explain the "main purpose doctrine" as