Student Lecture Notes:
Writing and E-Commerce Signature Law
Chapter Objectives:
 List the contracts that must be in writing under the Statute of
Frauds.
 Explain the effect of noncompliance with the Statute of Frauds.
 Apply the Statute of Frauds to contracts for the sale of land and
the part performance exception to this rule.
 Apply the Statute of Frauds to contracts that cannot be
performed within one year.
 Define guaranty contracts and explain when they must be in
writing.
 Identify when agents' contracts must be in writing.
 Describe the Statute of Frauds applicable to the sale of goods.
 Define and apply the doctrine of promissory estoppel.
 Define and describe the effects of an integration clause.
 Apply the parol evidence rule.
 Describe writing requirements for international contracts.
Contracts that must be in writing under the Statute of Frauds
Under the Statute of Frauds, many states require the following types
of contracts to be in writing:
Contracts involving interests in land
 Contracts that by their own terms cannot possibly be performed
within one year
 Collateral contracts where a person promises to answer for the
debt or duty of another
 Promises made in consideration of marriage
 Contracts for the sale of goods for more than $500
 Real estate agents' contracts

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Agents' contracts where the underlying contract must be in
writing
 Promises to write a will
 Contracts to pay debts barred by the statute of limitations or
discharged in bankruptcy
 Contracts to pay compensation for services rendered in
negotiating the purchase of a business
 Finders fee contracts

Noncompliance with the Statute of Frauds
Generally, an executor contract that is not in writing even though the
Statute of Frauds requires it to be is unenforceable by either party.
Statute of Frauds and contracts for the sale of land
Contracts that transfer an ownership interest in real property must be
in writing under the Statute of Frauds to be enforceable. Real
property includes the land itself as well as buildings, trees, soil,
minerals, timber, plants, crops, and other things permanently affixed
to the land. Fixtures, personal property that is permanently affixed to
real property, such as built-in cabinets in a house, become part of real
property. Contracts involving most other interests in real property,
such as mortgages, leases, life estates, and easements, must be in
writing.
Statute of Frauds and contracts that cannot be performed within
one year
To prevent contract disputes that may occur toward the end of a longterm contract, contracts that cannot be performed within one year, by
the contracts own terms, must be in writing. If the performance of the
contract is possible within one year, the contract may be oral.
Guaranty contracts
A guaranty contract or collateral contract occurs where one person
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agrees to answer for the debts or duties of another person. Collateral
promises must be in writing under the Statute of Frauds.
Agents' contracts
Many states require that agent's contracts to sell property covered by
the Statute of Frauds must be in writing to be enforceable. This is
called the equal dignity rule.
Statute of Frauds and the sale of goods
Contracts for the sale of goods costing $500 or more must be in
writing under section 201 of the Uniform Commercial Code Statute of
Frauds.
Promissory estoppels
Promissory estoppel is an equitable doctrine that permits enforcement
of oral contracts that should have been in writing. The following
conditions must be met:
The promise induced action or forbearance of action by another.
 The reliance on the oral promise was foreseeable.
 Injustice can be avoided only be enforcing the oral promise.

Integration clauses
The signature of the party against whom enforcement is sought needs
to be on the written contract. Several writings can be integrated to
form a single contract. Integration can be by express reference or may
be implied from the circumstances.
Standards of interpretation
Ordinary words are given their usual dictionary meaning.
 Technical words are given their technical meaning, unless a
different meaning is clearly intended.
 Specific terms are presumed to qualify general terms.

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When a preprinted form is used, typed words prevail over
preprinted words. Handwritten words prevail over both
preprinted and typed words.
 If there is an ambiguity in the contract, the ambiguity will be
resolved against the party who drafted the contract.
 If both parties are members of the same trade or profession,
words will be given their meaning as used in the trade.
 Words will be interpreted to promote the principal object of the
contract.

Parol evidence rule
Oral or written words outside the contract are called parol evidence.
Under the parol evidence rule, if a written contract is a complete and
final statement of the parties agreement, any prior or
contemporaneous oral or written statements that alter, contradict, or
are in addition to the terms of the written contract are inadmissible in
court regarding a dispute over the contract.
Exceptions to the parol evidence rule
Parol evidence may be admitted if it:
Shows that a contract is void or voidable.
 Explains ambiguous language.
 Concerns a prior course of dealing or course of performance
between the parties or a usage of trade.
 Fills in the gaps in a contract.
 Corrects an obvious clerical or typographical error.

Terms
collateral contract—A promise where one person agrees to
answer for the debts or duties of another person.
 easement—A given or required right to make limited use of
someone else's land without owning or leasing it.

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equal dignity rule—A rule that says that agent's contracts to sell
property covered by the Statute of Frauds must be in writing
to be enforceable.
 fixtures—Personal property that is permanently affixed to the
real property, such as built-in cabinets in a house.
 guarantor—The person who agrees to pay the debt if the primary
debtor does not.
 guaranty contract—The contract between the guarantor and the
original creditor.
 incorporation by reference—When integration is made by
express reference in one document that refers to and
incorporates another document within it.
 integration—The combination of several writings to form a single
contract.
 lease—A transfer of the right to the possession and use of the
real property for a set term in return for certain consideration;
the rental agreement between a landlord and a tenant.
 life estate—An interest in the land for a person's lifetime; upon
that person's death, the interest will be transferred to another
party.
 main purpose or leading object exception—If the main purpose
of a transaction and an oral collateral contract is to provide
pecuniary benefit to the guarantor, the collateral contract does
not have to be in writing to be enforced.
 merger clause—A clause in a contract that stipulates that it is a
complete integration and the exclusive expression of the
parties' agreement. Parol evidence may not be introduced to
explain, alter, contradict, or add to the terms of the contract.
 mortgage—A collateral arrangement where a property owner
borrows money from a creditor who uses a deed as collateral
for repayment of the loan.

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one year rule—An executory contract that cannot be performed
by its own terms within one year of its formation must be in
writing.
 parol evidence rule—A rule that says if a written contract is a
complete and final statement of the parties' agreement, any
prior or contemporaneous oral or written statements that alter,
contradict, or are in addition to the terms of the written
contract are inadmissible in court regarding a dispute over the
contract.
 parol evidence—Any oral or written words outside the four
corners of the written contract.
 part performance—An equitable doctrine that allows the court to
order an oral contract for the sale of land or transfer of
another interest in real property to be specifically performed if
it has been partially performed and performance is necessary to
avoid injustice.
 promissory estoppel—An equitable doctrine that prevents the
withdrawal of an offer by an offeror if it will adversely affect
an offeree who has adjusted his position in justifiable reliance
on the offer.
 real property—The land itself as well as buildings, trees, soil,
minerals, timber, plants, crops, and other things permanently
affixed to the land.
 Statute of Frauds—State statute that requires certain types of
contracts to be in writing.
 UCC Statute of Frauds—A rule that requires all contracts for
the sale of goods costing $500 or more and lease contracts
involving payments of $1,000 or more to be in writing.

Internet Links
Legal Information Institute:
http://www.law.cornell.edu/lexicon/statute_of_frauds.htm
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Electronic Signature Legislation:
http://library.findlaw.com/1999/Jan/1/241481.html
Extracted from Pearsons
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