The Statute of Frauds Section 10.1. Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 The Statute

The Statute of FraudsThe Statute of FraudsSection 10.1Section 10.1

Understanding Business and Personal Law

The Statute of Frauds The Statute of Frauds Section 10.1Section 10.1

Form of a Contract

Section 10.1Section 10.1The Statute of Frauds The Statute of Frauds

Section 10.2Section 10.2Special Rules and Formalities Special Rules and Formalities

1010ChapterChapter Form of a ContractForm of a Contract



Form of a Contract

What You’ll Learn

How to explain the purpose of the How to explain the purpose of the Statute of Frauds (p. 206)Statute of Frauds (p. 206)

How to explain the legal status of a How to explain the legal status of a contract that is not in writing (p. 206)contract that is not in writing (p. 206)



Form of a Contract

What You’ll Learn

How to identify the elements that must be How to identify the elements that must be included in a written contract (p. 206)included in a written contract (p. 206)

How to deal with contradictory and How to deal with contradictory and ambiguous terms in a written agreement ambiguous terms in a written agreement (p. 207)(p. 207)



Form of a Contract

What You’ll Learn

How to identify which contracts must be in How to identify which contracts must be in writing (p. 208) writing (p. 208)



Form of a Contract

Why It’s Important

Understanding which contracts must be in Understanding which contracts must be in writing, as well as the elements of a writing, writing, as well as the elements of a writing, will help you avoid pitfalls associated with will help you avoid pitfalls associated with the Statute of Frauds.the Statute of Frauds.



Form of a Contract

Legal Terms

breach of contract (p. 206)breach of contract (p. 206)perjury (p. 206)perjury (p. 206)Statute of Frauds (p. 206)Statute of Frauds (p. 206)memorandum (p. 206)memorandum (p. 206)goods (p. 213)goods (p. 213)real property (p. 213)real property (p. 213)



Form of a Contract

Purpose of a Writing

Elements of a Writing Evaluating Contradictory TermsEvaluating Ambiguous Clauses

Section OutlineSection Outline



Form of a Contract

Contracts That Must Be in WritingContracts to Pay Debts of OthersContracts to Pay Debts of Deceased

PersonsContracts Requiring More Than a Year

to Perform




Form of a Contract

Contracts That Must Be in Writing, continued

Contracts in Consideration of MarriageContracts for Sale of Goods of $500 or

MoreContracts to Sell Real Property




Form of a Contract

Pre-Learning Question Pre-Learning Question

Why do you think some contracts should be in writing?



Form of a Contract

Purpose of a Writing Purpose of a Writing

In early England, contracts did not In early England, contracts did not have to be written to be fully have to be written to be fully enforceable. Persons could be enforceable. Persons could be brought to trial for breach of written or brought to trial for breach of written or oral contracts.oral contracts.



Form of a Contract


A A breach of contractbreach of contract is a wrongful is a wrongful failure to perform one or more failure to perform one or more promises of a contract. promises of a contract.



Form of a Contract


Only persons who were not parties to Only persons who were not parties to the contract could be witnesses in the contract could be witnesses in court. To protect their friends or self-court. To protect their friends or self-interests, witnesses often made false interests, witnesses often made false statements under oath in court.statements under oath in court.



Form of a Contract


Making such false statements is called Making such false statements is called perjuryperjury and is a crime. and is a crime.



Form of a Contract


To discourage such practices, To discourage such practices, Parliament passed the “Act for the Parliament passed the “Act for the Prevention of Frauds and Perjuries,” Prevention of Frauds and Perjuries,” which became known as the Statute which became known as the Statute of Frauds. It required certain contracts of Frauds. It required certain contracts to be in writing to be enforceable.to be in writing to be enforceable.



Form of a Contract


Most states now have a Most states now have a Statute of Statute of FraudsFrauds, which are state laws requiring , which are state laws requiring that certain contracts be evidenced by that certain contracts be evidenced by a writing.a writing.



Form of a Contract

What is a breach of contract?



Form of a Contract

ANSWERANSWER

A wrongful failure to perform one or more promises of a contract.



Form of a Contract


What elements should be present in a written contract?



Form of a Contract

Elements of a Writing Elements of a Writing

A A memorandum memorandum is the written is the written evidence of an agreement, need not evidence of an agreement, need not be formal, and could be: be formal, and could be:

a letter a letter a sales slip a sales slip an invoicean invoice

a telegrama telegramwords written on a words written on a checkcheck



Form of a Contract


Elements of a writing should identify Elements of a writing should identify the following: the following:

PlacePlaceDateDateParties involvedParties involvedSubject matterSubject matter



Form of a Contract


Price and termsPrice and termsIntent of the partiesIntent of the partiesSignature of the party who may be Signature of the party who may be chargedcharged



Form of a Contract

Evaluating Contradictory Terms Evaluating Contradictory Terms

If changes are made to a contract, the If changes are made to a contract, the court will uphold the most recent court will uphold the most recent terms.terms.

If handwritten changes are made to If handwritten changes are made to a typewritten or printed contract, the a typewritten or printed contract, the handwritten terms will prevail. handwritten terms will prevail.



Form of a Contract

Evaluating Contradictory Terms Evaluating Contradictory Terms

Typewriting prevails over printing.Typewriting prevails over printing.A dollar amount written in words will A dollar amount written in words will prevail over the amount written in prevail over the amount written in figures. figures.



Form of a Contract

10.110.1

Contradictory Terms Contradictory Terms



Form of a Contract

Evaluating Ambiguous Clauses Evaluating Ambiguous Clauses

When a written contract can be When a written contract can be understood in different ways, the court understood in different ways, the court will lean in favor of the party who did will lean in favor of the party who did not draft the contract and against the not draft the contract and against the one who drafted it. one who drafted it.



Form of a Contract


What type of contracts do you think should be in writing?



Form of a Contract

Contracts That Must Be in Writing Contracts That Must Be in Writing

Every state has a law requiring that Every state has a law requiring that certain kinds of contracts be in writing certain kinds of contracts be in writing to be enforceable. to be enforceable.



Form of a Contract

Contracts to Pay Debts of Others Contracts to Pay Debts of Others

A contract that one person makes with A contract that one person makes with another to pay the debts of someone another to pay the debts of someone else must be in writing to be else must be in writing to be enforceable.enforceable.



Form of a Contract

Contracts to Pay Debts of Contracts to Pay Debts of Deceased Persons Deceased Persons

An executor uses property from the An executor uses property from the estate to pay off any debts.estate to pay off any debts.

If the estate lacks the money to pay If the estate lacks the money to pay the debt, the executor may promise to the debt, the executor may promise to pay them with his or her own money.pay them with his or her own money.



Form of a Contract

Contracts to Pay Debts of Contracts to Pay Debts of Deceased Persons Deceased Persons

Such an agreement, which is actually Such an agreement, which is actually an agreement to pay another’s debts, an agreement to pay another’s debts, must be in writing to be enforceable.must be in writing to be enforceable.



Form of a Contract

Contracts Requiring More Than Contracts Requiring More Than a Year to Perform a Year to Perform

All contracts must be written if they All contracts must be written if they cannot be performed within one year cannot be performed within one year of the date they are made. The year of the date they are made. The year legally begins when the contract is legally begins when the contract is made, not when performance is to made, not when performance is to start.start.



Form of a Contract

Contracts in Consideration Contracts in Consideration of Marriage of Marriage

When two persons agree to marry, a When two persons agree to marry, a written contract is not required. written contract is not required.

The promises they make to one The promises they make to one another serve as the consideration for another serve as the consideration for the contract.the contract.



Form of a Contract

Contracts in Consideration Contracts in Consideration of Marriage of Marriage

However, if one person agrees to However, if one person agrees to marry another person in return for a marry another person in return for a third person’s promise of money or third person’s promise of money or property, then the agreement must be property, then the agreement must be in writing. in writing.



Form of a Contract

Contracts for Sale of Goods Contracts for Sale of Goods of $500 or Moreof $500 or More

A contract for the sale of goods for A contract for the sale of goods for the price of $500 or more must be in the price of $500 or more must be in writing to be enforceable.writing to be enforceable.



Form of a Contract

Contracts for Sale of Goods Contracts for Sale of Goods of $500 or Moreof $500 or More

Goods Goods consist of movable items, consist of movable items, including specially manufactured including specially manufactured items. Furniture, books, livestock, items. Furniture, books, livestock, cultivated crops, clothing, automobiles, cultivated crops, clothing, automobiles, and personal effects of any kind are and personal effects of any kind are considered goods.considered goods.



Form of a Contract

For contracts requiring more than a year to perform, when does the year legally begin?



Form of a Contract

ANSWERANSWER

When the contract is made.



Form of a Contract

Contracts to Sell Real PropertyContracts to Sell Real Property

Contracts for the sale of Contracts for the sale of real real propertyproperty, which is land and anything , which is land and anything permanently attached to it, must be in permanently attached to it, must be in writing to be enforceable.writing to be enforceable.



Form of a Contract

Reviewing What You Learned

1. What is the purpose of the Statute of Frauds?

Section 10.1 Assessment



Form of a Contract


To prevent fraud and perjury


Answer



Form of a Contract


2. What is the legal status of a contract that is not is writing?




Form of a Contract


A contract that is supposed to be in writing, but which is not, is unenforceable.


Answer



Form of a Contract


3. What are the elements that must be included in a written contract?




Form of a Contract


Place, date, parties, subject matter, price and terms, and intent of the parties.


Answer



Form of a Contract


4. How are contradictory and ambiguous terms in a written agreement interpreted by a court?




Form of a Contract


With contradictory terms, the court will uphold the most recent terms. The court will interpret ambiguous clauses against the person who wrote the contract.


Answer



Form of a Contract


5. What contracts must be in writing?




Form of a Contract


Contracts to pay the debts of others and to pay the debts of deceased persons, contracts requiring more than a year to perform, and contracts in consideration of marriage.


Answer



Form of a Contract


Contracts to sell real property and contracts for the sale of goods of $500 or more.


Answer



Form of a Contract


Critical Thinking ActivityStatue of Frauds Does a writing have to be a formal document to satisfy the requirements of the Statute of Frauds?



Form of a Contract


Critical Thinking Activity AnswerStatue of Frauds No. A writing does not have to be a formal document to satisfy the requirements of the Statutes of Frauds.



Form of a Contract


Legal Skills in ActionHistory of the Law Clark and Fiona believe that the Statute of Frauds was originally intended as a criminal provision designed to catch con artists who prey on innocent, unsuspecting victims.



Form of a Contract


Legal Skills in ActionHistory of the Law Write a report in which you explain the actual historical context in which the Statute of Frauds was first enacted in England.



Form of a Contract


Legal Skills in Action AnswerHistory of the Law Reports will vary. The original purpose of the Statute of Frauds was to discourage the practice of fraudulent statements in court by witnesses when an oral contract has not been fulfilled.

The Statute of FraudsThe Statute of FraudsEnd of Section 10.1End of Section 10.1

Documents

The Statute of Frauds Section 10.1. Understanding Business and Personal Law The Statute of Frauds Section 10.1 Form of a Contract Section 10.1 The Statute