14
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Click your mouse
anywhere on the
screen when you are
ready to advance the
text within each slide.
After the starburst appears behind the blue
triangles, the slide is completely shown.
You may click one of the blue triangles to
move to the next slide or the previous slide.
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
“A verbal contract isn’t worth the
paper it’s written on.”
Samuel Goldwyn,
Hollywood producer
14
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
 Many agreements are unenforceable,
unless it, or some memorandum of it, is
in writing and signed. Includes contracts:
•
•
•
•
•
•
For any interest in land
That cannot be performed within one year
To pay the debt of another
Made by an executor of an estate
Made in consideration of marriage; and
For the sale of goods over $500
 Once a contract is fully executed, it
makes no difference that it was unwritten.
(The contract is not void.)
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
 A contract for interest in land must be in
writing to be enforceable.
• Exception: Full Performance by the Seller
• Exception: Part Performance by the Buyer
– the buyer of land may be able to enforce an oral
contract if she paid part of the price and either
entered the land or made improvements to it.
• Exception: Promissory Estoppel
– If a promisor makes an oral promise that should
reasonably cause the promisee to rely on it, and
the promisee does rely, the promisee may be
able to enforce the promise.
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
 Unenforceable unless in writing.
 When one person agrees to pay the
debt of another as a favor to that debtor,
it is called a collateral promise.
• Exception: if the promisor will also benefit from
the leading object of the transaction, the contract
does not have to be written.
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
 An executor’s promise to use her own
funds to pay a debt of the deceased
must be in writing to be enforceable.
 Unenforceable unless in writing.
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
 The contract or memorandum must be
signed by the defendant, and
 It must state with reasonable certainty:
• the name of each party
• the subject matter of the agreement, and
• all of the essential terms and promises.
14
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
 A contract for sale of goods worth more
than $500 is not enforceable unless
there is some writing, signed by the
defendant, indicating that the parties
reached an agreement.
14
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
 Within a reasonable time of making an
oral contract, if one merchant sends a
written confirmation to the other, and the
confirmation is definite enough to bind
the sender herself, then the merchant
who receives the confirmation will also
be bound by it unless he objects in
writing within 10 days.
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
 An oral contract may be enforceable,
even without a written memorandum, if:
• The seller is specially manufacturing the
goods for the buyer, or
• The defendant admits in court proceedings
that there was a contract, or
• The goods have been delivered or they
have been paid for.
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
 Parol evidence refers to anything
(apart from the written contract itself)
that was said, done, or written before
the parties signed the agreement or as
they signed it.
14
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
 When two parties make an integrated
contract, neither one may use parol
evidence to contradict, vary, or add to
its terms.
• Exception: Incomplete or Ambiguous
– If a court determines that a written contract
is incomplete or ambiguous, it will permit
parol evidence.
• Exception: Misrepresentation or Duress
– A court will permit parol evidence of
misrepresentation or duress.
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
14
Essentials of Business Law -- 4th Edition
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.