BLAW 3430 Chapter 15 – Flashcards
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All contracts do not have to be in writing to be enforceable.
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The word "parol" literally means release
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A number of courts have used the doctrine of promissory estoppel to displace the requirement of a writing by enforcing oral contracts within the statute of frauds
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Parol evidence refers only to any oral evidence that is outside an integrated written contract and not incorporated into it, either directly or by reference.
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A significant impediment to e-commerce has been the questionable enforceability of contracts entered into through electronic means, such as the Internet or e-mail, because of the writing requirements under contract and sales law
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The statute of frauds has to do with fraud in the inducement of a contract
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Most types of contracts are valid without being written.
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The statute of frauds generally requires that both parties sign the writing.
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A collateral promise is an undertaking to be primarily liable for the principal debtor's debt.
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Jim promises to marry Cynda if Cynda will buy him a new Ferrari for his birthday. This promise must be in writing to be enforceable.
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The part performance exception to the statute of frauds in many states requires both that the transferee has paid a portion of the purchase price and has either taken possession of the real estate or has started to make valuable improvements on it
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A usage of trade is a practice or method of dealing regularly observed and followed in a place, vocation, or trade.
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In an employment agreement with Carl, Arnold promises to work for Carl for the rest of his life. This promise must be in writing to be enforceable
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Clara types a letter to David setting forth the terms of their contract that falls within the statute of frauds. At the end of the letter, she types her name but does not sign her signature to it. If David wants to use the letter to satisfy the writing requirement, he may do so.
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A contract to pay for lawn care services costing $1,500 would have to be in writing to be enforceable.
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Under the Code an oral contract for specially manufactured goods costing $500 is enforceable even if the seller has not begun their manufacture.
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The UCC requires that all contracts for the sale of goods must be in writing.
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The UCC statute of frauds requires that the writing include all agreed-upon
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In order to be sufficient, an agreement required to be written under the statute of frauds must be signed at the bottom and notarized
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Bob sends Fred a letter offering to sell Fred his car for $2,500. Fred writes back that he'll take it. They now must get together and write a memorandum because it is a sale of goods for over $500.
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The Uniform Electronic Transactions Act, which has been adopted by all of the states and the District of Columbia, gives full effect to electronic contracts and develops a uniform legal framework for their implementation.
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The parol evidence rule applies to partially written agreements
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E-Sign was enacted by Congress in 2000 and makes electronic records and signatures valid and enforceable across the United States for many types of transactions in or affecting interstate or foreign commerce
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The statute of frauds applies to executory contracts only.
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On March 20, Alan orally agrees to work for Trower, Inc. for a period of one year commencing on June 1. No writing is necessary here, because the contract can be performed within one year.
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The parol evidence rule applies only to integrated contracts, meaning those in which the parties have assented to the written agreement as the statement of the complete agreement between them
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The parol evidence rule does not prevent the use of evidence that a party would like to use to establish the defense of fraud, duress, or undue influence
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In interpreting a contract, terms which have been separately negotiated are given priority over standardized pre-printed terms.
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Under the UCC parol evidence rule, usage of trade will take priority over specific provisions in a written contract.
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In order to induce a car dealer to sell her son a car on credit, Mary promises that she will pay for the son's car if the son defaults on his monthly payments to the dealership. Mary's promise must be in writing
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UCC Revised Article 8, which all states have adopted, provides that the statute of frauds applies to contracts for the sale of securities.
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An oral contract for the transfer of an interest in land may be enforced if the party seeking enforcement has so changed his position in reasonable reliance on the contract that a court can prevent injustice only by enforcing the contract
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The UCC permits an oral agreement for the sale of goods to be enforced against a party who admits to the contract in court, even though the statute of frauds requires the agreement in writing.
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The main purpose doctrine is an exception developed by the courts to the suretyship provision.
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The suretyship provision has been interpreted to include promises made to a debtor.
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The executor-administrator provision applies to promises of an executor of a decedent's estate to the decedent's creditors.
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Which of the following promises does NOT have to be evidenced by a writing in order to be enforceable?
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Mindy's agreement with Susan to buy her bike for $400.
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E-Sign specifically excludes:
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a. wills, codicils, and testamentary trusts. b. divorces. c. UCC transactions other than sales and leases of goods. d. All of the above.
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Which of the following is an exception to the suretyship provision requirement under the statute of frauds?
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A promise, the leading object of which is to obtain an economic benefit for oneself.
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Which of the following is a collateral promise?
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A mother tells a merchant to extend $1,000 worth of credit to her son and says, "If he doesn't pay, I will."
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What is another name for the main purpose doctrine?
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The leading object rule.
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Under the parol evidence rule, which of the following types of evidence may be used to vary or contradict the written agreement?
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Subsequent oral or written agreements modifying the original agreement.
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Under the UCC, a(n) __________ is a sequence of previous conduct between the parties to an agreement which may be fairly regarded as establishing a common basis of understanding for interpreting their conduct under the contrac
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course of dealing
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Under the UCC, __________ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection.
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course of performance
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Under the UCC, a(n) __________ is a practice or method of dealing regularly observed and followed in a place or vocation or trade.
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usage of trade
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In determining the meaning of a contract under the UCC, which of the following will have first priority?
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Express terms.
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Which of the following would NOT require a writing under the statute of frauds?
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Where a landscaper agrees to landscape the lot surrounding an office buildin
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The parol evidence rule is:
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a rule of substantive law.
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The UCC Article 2 statute of frauds provision applies to the sale of goods for the price of __________ or more.
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$500
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Examples of unenforceable oral contracts are:
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a. an oral promise to guarantee the additional duties of another. b. an oral agreement to substitute different land for that described in the original contract. c. an oral agreement to extend an employee's contract for six months to a total of two years. *d. All of the above.
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Which of the following would NOT meet the signature requirement for a writing to satisfy the Article 2 statute of frauds provision?
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a. A typewritten name. b. Handwritten initials. c. A printed name. d. All of the above meet the signature requirement.
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On March 1, Tammy, a student, received a telephone call from Watterson, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Tammy ask for a letter confirming the telephone conversation if she accepts the offer immediately?
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Yes, because the job offer is for longer than one year from March 1.
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In the Jenkins v. Eckerd Corporation case, the court held that:
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extrinsic evidence could not be admitted because the lease was an integrated agreement complete in all essential terms and the lease contained no latent or patent ambiguity.
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Barry's Sport Shop calls Champion Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champion sends 200. Can Barry force Champion to send the additional 100?
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No, because Barry does not have a writing signed by Champion Tee Shirts.
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Which of the following is untrue with regard to the interpretation of contracts?
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Technical terms will always be given technical meaning and language that has a commonly accepted meaning is always interpreted in accordance with that meaning.
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Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance Store. Paul says to Art, "If there isn't enough money in the estate, I'll personally see that the bill is paid." Which of the following is correct?
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An oral statement such as this is not enforceable because it is within the statute of frauds.
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An executor personally promises to pay the debts of the decedent's widow. Under what circumstances would the creditor need to have a writing in order to enforce this promise?
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If the promise is made to the creditor
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Which of the following promises in consideration of marriage would be outside the statute of frauds?
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Camilo and Laura mutually promise to marry each other in a formal ceremony on June 23.
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General contract law states that contracts that have to be in writing must:
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a. specify the parties to the contract. b. specify the subject matter and essential terms. c. be signed by the party to be charged or by his/her agent. d. All of the above.
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ABC, Inc. calls the Widget Corporation of America to order 400 widgets at $2 a widget. Widget accepts the oral order and then sends out an order confirmation form, with the pre-printed name Widget Corporation of America on the top of the form. The form states that an order has been received for "300" widgets and that it will be filled promptly.
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ABC can enforce the contract for 300 widgets, but not for 400 widgets.
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The parol evidence rule does NOT apply to:
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a. a typographical error that obviously does not represent the agreement of the parties. b. evidence showing one of the parties to the contract lacks contractual capacity. c. All of the above.
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A written, integrated contract contains a provision that states it will be effective for a "year." The plaintiff in a lawsuit claims that a "year" is obviously 12 months. The defendant claims that the contract meant a 10-month school year. Parol evidence
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can be used by the parties to clarify their intent because the term "year" in the contract is ambiguous.
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Which of the following is true regarding noncompliance with the statute of frauds?
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A party to a contract which was unenforceable because of the statute of frauds but who relied upon the contract may recover in restitution the benefits he conferred on the other party.
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In which of the following cases will an oral contract for the sale of goods of $750 be enforceable without a writing?
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a. The goods are to be specially manufactured for the buyer and the seller has made a substantial beginning of their manufacture. b. A party admits in an answer to a complaint in a lawsuit that the contract was made. c. Delivery and acceptance of the goods has been made. d. All of the above.
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Sam orally agreed to sell his house to Humphrey. Humphrey wanted it ready for his family quickly, so after he paid Sam a 5 percent deposit, he had a new roof put on, new carpeting installed, and he renovated the kitchen. Sam now thinks the place looks great and has decided not to sell. A business law student told him he could back out of the oral agreement. Can he? Explain
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In general, the statute of frauds would require a promise to convey land to be written. However, courts in many states will enforce this sale under the part performance exception if the transferee, Humphrey, has paid part of the purchase price and has either taken
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Richard agrees to supply Henry with all his needs of specially made shampoo for Henry's beauty salon. Henry believes that Richard is a representative of a famous hair products company, but he finds a letter to a competitor written by Richard two days before the agreement is signed proving that Richard is a fraud. Richard says that this letter may not be admitted to court since their contract is wholly integrated. Is he correct?
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No, prior and contemporaneous evidence is excludable, but only if it changes the terms of the contract. Here the evidence is admitted for the purpose of proving fraud in the inducement.
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Identify at least six situations in which the parol evidence rule does not apply.
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The text identifies eight situations in which the parol evidence rule does not apply: (a) a contract that is partly written and partly oral (the parties do not intend the writing to be their entire agreement); (b) a clerical or typographical error that obviously does not represent the agreement of the parties; (c) the lack of contractual capacity of one of the parties; (d) a defense of fraud, misrepresentation, duress, undue influence, mistake, illegality, lack of consideration, or other invalidating cause; (e) a condition precedent to which the parties agreed orally at the time of the execution of the written agreement and to which the entire agreement was made subject; (f) a subsequent mutual rescission or modification of the written contract; (g) parol evidence is admissible to explain ambiguous terms in the contract; and (h) the rule does not prevent a party from proving the existence of a separate, distinct contract between the same parties.
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What are the basic requirements of a writing within the statute of frauds in Article 2 of the UCC?
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Article 2 requires a writing in contracts for the sale of goods for a price of $500 or more. The UCC requires a writing or record sufficient to indicate that a contract has been made between the parties, signed by the party against whom enforcement is sought or by an authorized agent or broker, and specifying the quantity of goods to be sold.
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In what three cases does Article 2 of the UCC permit an oral contract?
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Three exceptions to the writing requirement are found in Article 2 of the UCC. One exception is that no writing is required when the goods are specially manufactured, not suitable for resale in the ordinary course of business, and the seller has made a substantial beginning on their manufacture or has made commitments for their procurement. No writing is necessary when the contract is admitted in pleadings or testimony in court. No writing is necessary where the goods have been paid for and accepted or where they have been received and accepted.
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With regard to the interpretation of a contract that falls within Article 2 of the UCC, what priority is given to each of the following items?a. Course of dealing b. Usage of trade c. Express terms d. Course of performance
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Express terms prevail. Course of performance controls course of dealing and course of dealing controls usage of trade.
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Under the Restatement and the Code, when can supplemental evidence be used with a written contract?
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Although an integrated written agreement may not be contradicted by evidence of a prior agreement or of a contemporaneous agreement, a written contract may be explained or supplemented by: (1) course of dealing between the parties; (2) usage of trade; (3) course of performance; or (4) evidence of consistent additional terms unless the writing was intended by the parties to be a complete and exclusive statement of their agreement. The Restatement and the Code permit supplemental consistent evidence to be introduced into a court proceeding if it does not contradict a term of the original agreement and would probably not have been included in the original contract
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Define the statute of frauds and give an example of what is covered.
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The statute of frauds requires that certain designated types of contracts be evidenced by a writing to be enforceable. Contracts to pay the debt of another, contracts that cannot possibly be performed within one year, contracts in consideration of marriage, agreements for the transfer of an interest in land, contracts for the sale of goods for the price of $500 or more, and contracts of an executor of an estate to personally pay the debts of the decedent are examples of contracts that must be in writing to be enforceable.
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On April 2, Derrick hires JoAnn to work for ten months starting on June 10. Does the employment contract have to be written? Explain
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The statute of frauds requires that all contracts that cannot be fully performed within one year be in writing. The year runs from the time the agreement is made, not from the time when the performance is to begin. Thus, this contract is within the statute of frauds and must be in writing in order to be enforceable, since it cannot be fully performed within one year of April 2
