Contracts in Writing

1
Contracts in Writing

• Chapter 11

2
An Act for the Prevention of Frauds and Perjuries

• Enacted in 1677 by the English Parliament.
• Required that certain kinds of contracts had to
  be in writing and signed by the party against
  whom enforcement was sought.
• Today, all states have enacted a Statute of
  Frauds to ensure that certain kinds of contracts
  are not forgotten, misunderstood or fabricated.

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Contracts That Require a Writing

• Contracts involving interests in land
• Contracts that by their own terms cannot possibly
  be performed within one year.
• Promises made in consideration of marriage.
• Contracts for the sale of goods for more than
  500.
• Contracts to answer for the duty of another

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Sufficiency of the Writing

• Simply requires the essential terms
• the parties consideration
• the subject matter
• signed by the party against whom enforcement is
  sought.
• signature may be initials, an X, symbol, even
  an unsigned fax with name printed on the top.
• Signature may be affixed by an authorized agent.
• The writing may be a memo, check, receipt, etc.
  
• Handwritten words prevail over preprinted.
• If there is an ambiguity, the ambiguity goes
  against the person who drafted the contract.

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Contracts Involving Interests in Land

• Any contract that transfers an ownership interest
  in real property (land, trees, buildings,easements
  , fixtures, mortgages).
• Part Performance Exception - If an oral contract
  for land has been partially performed , it may be
  taken out of the Sof F.

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One Year Rule

• Contracts that cannot be fully performed within
  1year of the making of the contract fall within
  the S of F and require a writing.
• Possibility test - Ask NOT whether it is likely
  or probable that the agreement will be performed,
  but whether its possible.

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Contracts Made in Consideration of Marriage

• A promise to marry, which is made in
  consideration for some promise other than a
  reciprocal promise to marry, requires a writing.
  Ex. George promises to convey title of farm to
  Sues brother if Sue accepts his marriage
  proposal.
• Mutual promises to marry are not within the S of
  F.
• Pre-nuptial agreements must be in writing.

8
Agreements for Sale of Goods Over 500 Require a
Writing

• 2-201, A contract for the sale of goods for the
  price of 500 or more
• Modifications increasing the sales price from
  below 500 to 500 or more
• Exceptions
• 2-201(3)(a), specially manufactured goods
• 2-201(3)(b), an admission of an oral contract in
  court docs
• 2-201(3)(c), goods which have been paid for or
  accepted.

500
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Agreements to Pay for the Debts of Another

• Suretyship - Promisor promises to pay if primary
  obligor does not (guaranty contract)
• Main Purpose Exception - If the main purpose of
  the transaction is to provide a pecuniary
  (economic) benefit to the guarantor, the
  agreement doesnt need a writing.

I, John Smith, promise to pay my son Toms
legal bills for his DUI charge if Tom does
not pay. John Smith
10
Parol Evidence Rule

• Where the parties to a contract express their
  agreement in a writing with the intent that it be
  the full and final expression of their bargain,
  any other written or oral expressions made prior
  to or contemporaneous with the writing, are
  inadmissible to alter, vary, or change the terms
  of the contract.

• Exceptions -
• an agreement which the parties do not intend to
  be their entire agreement
• a clerical/typo error
• evidence showing a lack of capacity
• fraud, duress mistake, duress, undue influence
• to explain ambiguous terms in order to understand
  its intended meaning.

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Rules in Interpreting Contracts

• Look at the intent of the parties
• Both the specific words and their actions will be
  examined by the courts in drawing a conclusion.
• Prior practices and a course of dealing between
  the contracting parties will be taken into
  consideration.
• The custom in the business community (usage of
  trade) will be examined.
• Specific terms are given greater weight than
  general language.
• Where a term has several possible meanings, it
  will be interpreted against the party who drafted
  the contract.
• Words control over figures.
• Written provisions are given preference over
  typed or pre-printed provisions typed provisions
  are given preference over pre-printed provisions.