George Mason School of Law
Contracts I
XXII. Statute of Frauds
F.H. Buckley
fbuckley@gmu.edu
1
The Statute of Frauds: Why 1677?
Party
on,
dudes!
2
Why 1677?
 Juries as fact-finders
3
Why 1677?
 Juries as fact-finders
 Interested parties not admissible as
witnesses
4
Why 1677?
 Juries as fact-finders
 Interested parties not admissible as
witnesses
 If that made the Statute of Frauds
necessary then, why do we need it
now?
5
The problem: A trap for the
unwary?
6
What’s the purpose of the SoF?
• McIntosh at 517
7
What’s the purpose of the SoF?
 Evidentiary
 Antifraud
8
What’s the purpose of the SoF?
 Evidentiary
 Antifraud
 Cautionary
 Reflects seriousness of contracting
9
What’s the purpose of the SoF?
 Evidentiary
 Antifraud
 Cautionary
 Reflects seriousness of contracting
 Channeling
 Distinguishing enforceable contracts
10
What’s the purpose of the SoF?
 Evidentiary
 Antifraud
 Cautionary
 Reflects seriousness of contracting
 Channeling
 Distinguishing enforceable contracts
 [Economizing on court costs?]
11
The Statute of Frauds
Restatement § 110
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

12
(a) a contract of an executor or administrator to answer for a duty of his
decedent;
(b) a contract to answer for the duty of another (the suretyship
provision);
(c) a contract made upon consideration of marriage (the marriage
provision);
(d) a contract for the sale of an interest in land (the land contract
provision);
(e) a contract that is not to be performed within one year from the
making thereof (the one-year provision).
(2) The following classes of contracts, which were traditionally subject
to the Statute of Frauds, are now governed by Statute of Frauds
provisions of the Uniform Commercial Code:
(a) a contract for the sale of goods for the price of $500 or more
(Uniform Commercial Code § 2-201);
(c) a contract for the sale of personal property not otherwise covered, to
the extent of enforcement by way of action or defense beyond $5,000 in
amount or value of remedy (Uniform Commercial Code § 1-206).
Restatement § 110
MY LEGS
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
13
M: consideration of marriage;
Y: not to be performed within one year;
L: sale of an interest in land;
E: a contract of an executor;
G: sale of goods for $500 or more;
S: a contract to answer for the duty of
another (the suretyship provision)
What is the sanction for noncompliance?
 Restatement § 110(1): not
enforceable absent a memorandum in
writing … signed by the party to be
charged.
14
What is the sanction for noncompliance?
 UCC § 2-201(1) Except as otherwise provided
in this section a contract for the sale of goods
for the price of $500 or more is not enforceable
by way of action or defense unless there is
some writing sufficient to indicate that a
contract for sale has been made between the
parties and signed by the party against whom
enforcement is sought or by his authorized
agent or broker.
15
So when would we want to
require a writing?
 What do the categories of
Restatement § 110 tell us?






16
M: consideration of marriage;
Y: not to be performed within one year;
L: sale of an interest in land;
E: a contract of an executor;
G: sale of goods for $500 or more;
S: a contract to answer for the duty of another
(the suretyship provision)
The Statute of Frauds
What’s its Purpose? McIntosh
 Major Contracts
 Possibility of a ill-considered promise
17
Marriage Settlements
 The old action for breach of promise
18
Marriage Settlements
 Restatement § 124
 Within the SoF if the consideration is a
“marriage or a promise to marry” unless
only “mutual promises of two persons to
marry each other”
19
Marriage Settlements
 A and B promise to marry and A
reneges?
20
Marriage Settlements
 A and B promise to marry and A
reneges?
 Not in SoF if only “mutual promises of
two persons to marry each other”
21
Marriage Settlements
 A promises to settle Blackacre
upon B when she marries A:
 Restatement 124, Illustration 1
22
Marriage Settlements
 Restatement §§ 110(1)(c), 124
 A promises to settle Blackacre upon
B when she marries A: Illustration 1
 What does the reference to
“consideration” exclude?
23
Marriage Settlements
 A promises to settle Blackacre upon B
when she marries A: Illustration 1
 What does the reference to
“consideration” exclude?
 Cf. illustration 5
24
Promises not to be performed
within One Year
 Restatement § 110(1)(e)
 What is the rationale for the rule?
25
Promises not to be performed
within One Year
 What is the rationale for the rule?
 An aide-memoire?
 Or a significant contract?
26
Promises not to be performed
within One Year
 What is the rationale for the rule?
 An aide-memoire?
 Or a significant contract?
 Do you agree with Farnsworth at
521?
27
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 What does the Π have to assert to win in
McIntosh at 515?
28
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 What does the Π have to assert to win in
McIntosh?
 Not terminable at will, but for a fixed term
29
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 What does the Π have to assert to win in
McIntosh?
 Not terminable at will, but for a fixed term
 What that term might be
30
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 What does the Π have to assert to win in
McIntosh?
 Not terminable at will, but for a fixed term
 What that term might be
 Gee, let’s say one year
31
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 What does the Π have to assert to win in
McIntosh?
 Not terminable at will, but for a fixed term
 What that term might be
 But then Δ asserts the promise is not
unenforceable by virtue of the Statute of
Frauds
32
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 It’s Feb. 5, 2015. I ask you to work for me
from March 1, 2015 until March 1, 2016
33
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 It’s Feb. 5, 2014. I ask you to work for me
from March 1, 2014 until March 1, 2015
 Restatement § 130(1) Where any promise
in a contract cannot be fully performed
within a year from the time the contract is
made, all promises in the contract are within
the Statute of Frauds until one party to the
contract completes his performance.
34
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 It’s Feb. 1, 2014. I ask you to repaint the
ceiling of the Sistine Chapel, which likely will
take five years.
35
How does the one-year rule work?
 It’s November 1, 2012. I ask you to repaint
the ceiling of the Sistine Chapel, which likely
will take five years.
 Restatement § 130(1) Where any promise in a
contract cannot be fully performed within a year from
the time the contract is made
36
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 I insure your house against fire for five
years without a writing. Three years have
elapsed.
 Restatement § 130, illustration 1.
37
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 I insure your house against fire for five
years without a writing. Three years have
elapsed.
 Restatement § 130, illustration 1.
38
Land: 110(1)(d)
39
“Tis the only thing worth
fighting for, worth dying for”
Is land different?
 What do real estate agents make you
do if you want to buy a house?
40
Is land different?
 What do real estate agents make you
do if you want to buy a house?
 Written offers throughout
 Closing
41
Is land different?
 Restatement § 125
 “A promise to transfer to any person any
interest in land”
 Qu. Present conveyances?
42
Is land different?
 Restatement § 125
 “A promise to transfer to any person any
interest in land”
 Qu. Present conveyances? Illustration 11
43
Is land different?
 Restatement § 125
 “A promise to transfer to any person any
interest in land”
 Qu. Leaseholds? Cf. 125(4)
44
Goods worth more than $500
 Restatement § 110(2)(a) → UCC §
2-201

45
a contract for the sale of goods for the price of $500 or
more is not enforceable by way of action or defense unless
there is some writing sufficient to indicate that a contract
for sale has been made between the parties and signed by
the party against whom enforcement is sought or by his
authorized agent or broker. A writing is not insufficient
because it omits or incorrectly states a term agreed upon
but the contract is not enforceable under this paragraph
beyond the quantity of goods shown in such writing.
Goods worth more than $500
 Restatement § 110(2)(a) → UCC §
2-201

46
a contract for the sale of goods for the price of $500 or
more is not enforceable by way of action or defense unless
there is some writing sufficient to indicate that a contract
for sale has been made between the parties and signed by
the party against whom enforcement is sought or by his
authorized agent or broker. A writing is not insufficient
because it omits or incorrectly states a term agreed upon
but the contract is not enforceable under this paragraph
beyond the quantity of goods shown in such writing.
Goods worth more than $500
 Restatement § 110(2)(a) → UCC §
2-201

47
a contract for the sale of goods for the price of $500 or
more is not enforceable by way of action or defense unless
there is some writing sufficient to indicate that a contract
for sale has been made between the parties and signed by
the party against whom enforcement is sought or by his
authorized agent or broker. A writing is not insufficient
because it omits or incorrectly states a term agreed upon
but the contract is not enforceable under this paragraph
beyond the quantity of goods shown in such writing.
Suretyship (guarantor)
Seller of Ferrari
Idiot, Doting Parent
stands surety
48
Spendthrift Child
Suretyship
Obligee
Principal (obligor)
49
Suretyship
Obligee (promisee)
Surety for Principal
(promisor)
50
Principal (obligor)
Suretyship Agreements
 Restatement § 112
 The promisee (Ferrari seller) is an
obligee of the other’s duty (owed money
by the child)
 The promisor is a surety for the other
(parent gurantees child’s debt to Ferrari
owner)
 The promisee knows or has reason to
know of the suretyship relation (Ferrari
seller knows of guarantee)
51
Executors
 Restatement § 111: “if a similar
contract to answer for the duty of a
living person would be within the SoF
to answer for the duty of another”
 Piggybacks on the suretyship provision
52
Executors
 Restatement § 111: “if a similar
contracts to answer for the duty of a
living person would be within the SoF
to answer for the duty of another”
 Piggybacks on the suretyship provision
 Cf. Illustrations 1 and 2
53
Getting around the SoF
 Estoppel
 Part Performance
 Note or memorandum in writing
54
Will estoppel work against the
SoF?
 Restatement § 139(1). A promise which the
promisor should reasonably expect to induce
action or forbearance on the part of the
promisee or a third person and which does
induce the action or forbearance is enforceable
notwithstanding the Statute of Frauds if
injustice can be avoided only by enforcement
of the promise. The remedy granted for breach
is to be limited as justice requires.
55
Will estoppel work against the
SoF?
 Restatement § 139(2) In determining whether injustice
can be avoided only by enforcement of the promise, the
following circumstances are significant: (a) the
availability and adequacy of other remedies, particularly
cancellation and restitution; (b) the definite and
substantial character of the action or forbearance in
relation to the remedy sought; (c) The extent to which
the action of forbearance corroborates evidence of the
making and terms of the promise, or the making and
terms are otherwise established by clear and convincing
evidence; (d) the reasonableness of the action or
forbearance; (e) the extent to which the action of
forbearance was foreseeable by the promisor.
56
Was McIntosh a proper case for estoppel?
Oh, the hardship!!!
57
Was McIntosh a proper case for estoppel?
What do you think would have
happened if McIntosh had asked
for a written contract?
58
Are salesmen given tenure?
Ron Popeil and the Veg-o-matic
59
Was McIntosh a proper case for estoppel?
If you’re Murphy, how do you
react to the decision?
60
Is land different?
 Restatement § 125
 “A promise to transfer to any person any
interest in land”
 What counts as reliance? Schwedes
at 521
 Securing financing?
 The offer to send the purchase price?
61
Part Performance and Land
 Cf. Restatement § 129
 The party to be charged “has so changed
his position that injustice can be avoided
only by specific performance”
62
Part Performance and Land
 Restatement § 129
 Buyer gives seller purchase price. Can
buyer have specific performance?
 Cf. Illustration 1
63
Part Performance and Land
 Restatement § 129
 Buyer gives seller purchase price. Can
buyer have specific performance?
 Cf. Illustration 1
 Contrast Illustration 3
64
Can you distinguish Schwedes from McIntosh?
 But cf. Restatement § 129
 Buyer gives seller purchase price. Can
buyer have specific performance?
 Cf. Illustration 1
 Contrast Illustration 3
 Restatement § 139(2)(a): “the availability
of other remedies”
65
The “note or memorandum in
writing”
 Restatement § 131. Unless additional
requirements are prescribed by the particular
statute, a contract within the Statute of Frauds
is enforceable if it is evidenced by any writing,
signed by or on behalf of the party to be
charged, which (a) reasonably identifies the
subject matter of the contract, (b) is sufficient
to indicate that a contract with respect thereto
has been made between the parties or offered
by the signer to the other party, and (c) states
with reasonable certainty the essential terms of
the unperformed promises in the contract.
66
The UCC on the “note or
memorandum in writing”
 UCC § 2-201(1)(1) Except as otherwise provided in this
section a contract for the sale of goods for the price of
$500 or more is not enforceable by way of action or
defense unless there is some writing sufficient to indicate
that a contract for sale has been made between the
parties and signed by the party against whom
enforcement is sought or by his authorized agent or
broker. A writing is not insufficient because it omits or
incorrectly states a term agreed upon but the contract is
not enforceable under this paragraph beyond the
quantity of goods shown in such writing.
67
The “note or memorandum in
writing”
 What is a signature?
 Cf. Restatement § 134: “any symbol made
or adopted with an intention, actual or
apparent, to authenticate the writing as
that of the signer”
 Cf. Illustrations 1 and 3
68
Monetti at 525
Melform products
69
Monetti
 How was this within the SoF?
70
Monetti
 How was this within the SoF?
 One year
 Sale of Goods?
71
Monetti
 How was this within the SoF?
 One year
 Sale of Goods?
 Why might it matter which it is?
72
Monetti
 In what sense is this not like a sale of
goods?
 Cf. UCC 2-105(1)
 Sale of goods or distributorship agreement?
 Which one fits better (predominant purpose)?
 Both statutes?
 A mixed contract (pick and choose)?
73
Monetti
 Who is the party to be charged?
74
Monetti
 How was the first writing “signed” by
Anchor?
75
Monetti
 How was the first writing “signed” by
Anchor?
 Typed initials “SS” on Steve Schneider’s
draft “Topics for Discussion”
76
Monetti
 UCC § 1-201(37) Signed “includes any
symbol executed or adopted by a party
with present intention to adopt or accept
a writing.”
 Restatement § 134 (“any symbol made
or adopted with an intention, actual or
apparent, to authenticate a writing”)
 Illustrations 1 and 3
77
Monetti
 How was the first writing “signed” by
Anchor?
 Typed initials “SS”
 Did it matter that this was a precontractual draft?
78
Monetti
 How was the first writing “signed” in
Monetti?
 Typed initials “SS”
 Did it matter that this was a precontractual draft?
 Restatement § 136: “at any time before or
after the formation of the contract”
79
Monetti
 How was the first writing “signed” in
Monetti?
 Typed initials “SS”
 Did it matter that this was a precontractual draft?
 UCC§ 2-201(1): “has been made”
80
Monetti
 How was the first writing “signed” in
Monetti?
 Typed initials “SS”
 Did it matter that this was a precontractual draft?
 Posner’s three cases on 526: how to tell
them apart?
81
Monetti
 What about contracts accepted by
email?
82
Monetti
 UCC § 1-201(37) Signed “includes any
symbol executed or adopted by a party
with present intention to adopt or accept
a writing.”
 Restatement § 134 (“any symbol made
or adopted with an intention, actual or
apparent, to authenticate a writing”)
83
Monetti
 What about the internal “summary
agreement” by Raymond Davis?
84
Monetti
 What about the internal memo?
 Δ’s letterhead suffices
85
Monetti
 What about the internal memo?
 Δ’s letterhead suffices
 Is Restatement § 132 applicable?:
 Several writings are integrated if one is
signed and the circumstances indicate they
belong to the same transaction
86
Monetti
 What about the internal memo?
 Δ’s letterhead suffices
 How did Π obtain this?
 Is Restatement § 132 applicable?
 Posner: probably not, since they don’t refer
to each other (527)
 Posner: “we are permitted to connect
them” (529)
87
Monetti
 What was the part performance?
 Restatement § 139(2)(b) “definite and
substantial character of the action”)
 UCC § 2-201(3)(c) (goods “received and
accepted”)
88