Contracts--Statute of Frauds & Parol Evidence Rule

1
Contracts--Statute of Frauds Parol Evidence Rule

• Statute of Frauds (S/F)
• What is it how did it get its name?
• Some of the types of contracts that must be in
  writing
• Contract for the transfer of any interest in real
  estate (incl. a lease for more than one year
  also includes things like mortgages, easements,
  transfers of fractional interests, mineral
  interest, and so on)
• Contract that, according to its specific terms,
  cant possibly be performed within one year from
  the time the contract was made.
• Contract for the sale of goods for a price of
  500 or more (UCC 2-201).
• Contract for the lease of goods for 1,000 or
  more (e.g., rentals of equipment, vehicles, etc.)
  (cont. on next slide)

2
Statute of Frauds, cont.

• Contract for the sale of securities (e.g.,
  stocks, bonds, etc.) regardless of amount
• Contract in which part of the consideration is a
  promise of marriage (archaic, but still has
  application to pre-nuptial agreements)
• Contract to pay the debt of another
• There are a few others. E.g., a security
  agreement, which is an agreement in which a
  debtor puts tangible or intangible personal
  property (any property other than real estate)

3
Statute of Frauds, cont.

• Like the concepts in Illegal Contracts Reality
  of Consent, the S/F is a merely a defense to a
  breach of an unperformed contract
• Why there are so many exceptions the rationale
  for them
• Recall Promissory Estoppel from reading in Chp.
  13 on considerationvery similar (or identical)
  concept creates many of the exceptions to the S/F
• I didnt have time to cover Promissory Estoppel
  in the short time we spent on Consideration, but
  go back an study it closely.

4
Statute of Frauds, cont.

• Castillo v. Rios
• Facts
• Why was the contract within the Statute of
  Frauds?
• Exception to requirement of document in the case
  of real estate
• (1)
• (2)
• (3)
• What facts convinced the court that the
  requirements were met?
• Does the part performance exception for real
  estate contracts require more than it does for
  other contracts within the S/F?
• Is it sort of Promissory Estoppel Plus?

5
Statute of Frauds, cont.

• Harmon v. Tanner Motor Tours of Nev., p. 378
• Facts
• What caused this agreement to be within the S/F?
• What created the exception to the requirement of
  documentation in this particular case?
• What was it about the law in Nevada that was
  different than in most states?
• Also, note that the remedy in this case was a
  decree (court order) of specific performance.
  What does this mean? Why did the court grant it,
  rather than just award damages?

6
Statute of Frauds, cont.

• Shattuck v. Klotzbach, p. 383 (Lots of imp. stuff
  here)
• Facts
• Why was the contract within the S/F?
• What were the documents?
• When will a court treat multiple documents as a
  single unit for the purpose of satisfying the
  documentation requirement?
• What about the content of the document(s)? What
  has to be in the written document?
• Common law (with a little extra for real estate
  agreements)
• UCC (sale of goods for 500 or more, lease of
  goods for 1,000 or more, or sale of securities)
• Whose signature must be on a document (or
  multiple documents treated as one) to fulfill the
  S/F requirement?
• What form did the required signature take in this
  case?

7
Statute of Frauds, cont.

• Two other important variations in the S/F for
  contracts covered by the UCC (in addition to
  relaxed content requirements)
• No general part performance exception, but 3
  very specific exceptions in UCC 2-201(3) (study
  closely)
• (1)
• (2)
• (3)
• Third way of fulfilling documentation
  requirement (UCC 2.201(2) (study closely)
• The critical thing is that under certain
  circumstances, a plaintiff can use a document
  against a defendant to fulfill the requirement of
  documentation even without the defendants
  signature.
• (1)
• (2)
• (3)

8
Parol Evidence RuleVery Imp.

• The basic premise
• What is the first condition for the rule to
  apply?
• How you can take care of this in the document
  itself
• What, exactly, does the rule say?
• Ex
• Exceptions (actually, these are just situations
  in which the rule does not apply, rather than
  being exceptions)
• (1) Ambiguity
• (2) Typos
• (3) Mistake, fraud, duress, unconscionability,
  etc.
• (4) Condition precedentshows that obligations
  didnt come into existence
• (5) Modifications