Tuesday, December 25, 2007
The statute of frauds refers to the requirement that certain kinds of contracts be made in writing and signed.
Traditionally, the statute of frauds requires a writing signed by the party against whom enforcement is sought in the following circumstances:
Law students often remember these circumstances by the mnemonic "MYLEGS" (marriage, year, land, executor, goods, surety).
It is important to note that in the United States, each State; in Canada, each province; and in Australia each State has its own variation on the statute of frauds, which may differ significantly from the traditional list.
The term statute of frauds comes from an English statutory law (29 Car. II c. 3) passed in 1677 and more properly called the Statute of Frauds and Perjuries. Many common law jurisdictions have such a statute (i.e., statutory law) or provision in a statute, while a number of civil law jurisdictions have similar requirements in their civil codes.
The writing that the Statute requires is a precondition to maintaining a suit for breach of contract (or other obligation). However, the Statute is used as a defense, which defense is waived if the person against whom enforcement is sought fails to raise in a timely manner. Thus, the burden of showing evidence that such a writing exists only comes into play when a Statute of Frauds defense is raised by the defendant. A defendant who admits the existence of the contract in his pleadings, under oath in a deposition or affidavit, or at trial, may not use the defense.
A statute of frauds defense may also be affected by a showing of part performance, actually there are two different conditions. If the parties have taken action in reliance on the agreement, as in the case Riley v. Capital Airlines, Inc. the court held that part performance does not take an executory portion of contract out of the Statute of Frauds. Each performance constitutes a contract that fall outside the Statute of Frauds and was enforceable to the extent it is executed. But the unexecuted portion of the contract falls within the Statute of Frauds and is unenforceable. As a result, only the executed portion of the contract can be recovered, and the doctrine of part performance does not remove the contract from the statute. In the other hand, the court of case Schwedes v. Romain stated that partial performance and grounds for estoppel can make the contract effective. If the buyer takes possession by actually occupying the property, most courts will enforce the contract. Also, the Statute of Frauds will be suspended if the buyer has made permanent improvements to the property or rendered partial or full payment. This is the situation that a court may uphold the contract despite a violation of the statute of frauds because the parties' subsequent actions verify that a contract existed. Courts are wary of parties misusing the statute of frauds as a "get out of jail free card" in breach of contract actions.
Under common law, the Statute of Frauds also applies to contract modification - for example, suppose party A makes an oral agreement to lease a house from party B for 9 months. Immediately after taking possession party A decides that he really likes the place, and makes an oral offer to party B to extend the term of the lease by 6 months. Although neither agreement alone comes under the Statute of Frauds, the extension modifies the original contract to make it a 15-month lease, thereby bringing it under the Statute. In practice, this works in reverse as well - an agreement to reduce the lease from 15 months to 9 months would not require a writing. However, almost all jurisdictions have enacted statutes that require a writing in such situations. The Uniform Commercial Code abrogated this requirement for contract modification, discussed below.
Contracts in consideration of marriage.
Contracts which cannot be performed within one year.
Contracts for the transfer of an interest in land.
Contracts by the executor of a will to pay a debt of the estate with their own money.
Contracts for the sale of goods above a certain value.
Contracts in which one party becomes a surety (acts as guarantor) for another party's debt or other obligation. Uniform Commercial Code
An agreement may be enforced even if it does not comply with the statute of frauds in the following situations:
Merchant's Firm Offer, under the UCC. If one merchant sends a writing sufficient to satisfy the statute of frauds to another merchant, the merchant has reason to know of the contents of the sent confirmation and the receiver does not object to the confirmation within 10 days, the confirmation is good to satisfy the statute as to both parties.
Admission of the existence of a contract by the defendant under oath,
Part Performance of the contract. The agreement is enforceable up to the amount already paid, delivered, etc.
The goods were specially manufactured for the buyer and the seller either 1) began manufacturing them, or 2) entered into a third party contract for their manufacture, and the manufacturer cannot without undue burden sell the goods to another person in the seller's ordinary course of business-- for example, t-shirts with a baseball team logo or wall-to-wall carpeting for an odd-sized room.
Posted by qwertyuio at 2:00 PM