CHAPTER 15: CONTRACTS IN WRITING
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TOPICS COVERED CHAPTER 15:
CONTRACTS IN WRITING
I. Statute of Frauds.
A. Contracts Within the Statute of Frauds.
B. Compliance With the Statute of Frauds.
C. Effect of Noncompliance.
II. Parol Evidence Rule.
A. The Rule.
B. Situations to Which the Rule Does Not Apply.
C. Supplemental Evidence.
III. Interpretation of Contracts.
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INTRODUCTION
 An oral contract is generally as
enforceable as a written contract,
unless otherwise provided by statute.
 Rule – contracts within the statute of
frauds must be evidenced by a
writing to be enforceable. 
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Following types of contracts fall under
the Statute of Frauds and must in
writing to be enforceable:
• Promises to pay the debts of others
(suretyship).
• Promises of an executor to personally
answer for debts of decedent.
• Agreements in consideration of marriage.

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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Following types of contracts fall under
the Statute of Frauds and must in
writing to be enforceable:
• Agreements for the transfer of an interest
in land.
• Agreements not to be performed within
one year.
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Electronic Records.
 The Uniform Electronic Transactions
Act (UETA) gives full effect to electronic
contracts, by considering electronic
records to fulfill the writing
requirement (state laws).
 E-SIGN (federal statute).
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Suretyship Provision – applies to
promises to pay the debts of others.
• Surety (promisor) to a creditor
(promisee) to perform the duties of a
third person (principal-debtor) if the
principal debtor does not perform, said
to be a collateral-promise. 
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Suretyship Provision.
• Original Promise.
• Main Purpose Doctrine: promisor seeks
to obtain an economic benefit she did
not previously have. ROSEWOOD CARE
CENTER, INC. V. CATERPILLAR, INC. (2007).
• Promise Made to Debtor: suretyship
provision does not include promise to
debtor.
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Executor-Administrator Provision.
• Applies to the promises of an executor
of a decedent’s will, to personally
answer for duty of decedent.
 Marriage Provision.
• Does not apply to mutual promises to
marry, but only to some other
consideration (usually money or
property).
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Land Contract Provision– applies to
promises to transfer any rights,
privileges, powers, or immunities in
real property.
• Exception: Part Performance.
• Exception: Oral promise is enforceable
if the interest has already been
transferred.
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 One-Year Provision.
• Contracts that cannot be performed in
one year must be in writing to be
enforceable.
• The Possibility Test: courts ask whether
is it possible for the contract to be
performed in one year?
• IACONO V. LYONS (2000).
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 One-Year Provision.
• Computation of Time: clock starts
when the agreement is made.
• Full Performance by One Party: courts
hold the contract is enforceable
against the other party.
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Sales of Goods – applies to a
contract for the sale of goods for the
price of $500 or more.
• Admission – admission in pleadings,
testimony, or otherwise in court makes
the contract enforceable for the
quantity of goods admitted. 
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Sales of Goods.
• Specially Manufactured Goods – an
oral contract for specially
manufactured goods is enforceable.
• KALAS V. COOK (2002).
• Delivery or Payment and Acceptance –
validates the contract only for the
goods that have been accepted or for
which payment has been accepted.
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CONTRACTS WITHIN
THE STATUTE OF FRAUDS
 Modification or Rescission of
Contracts within the Statute of
Frauds – oral contracts modifying
contracts are unenforceable if the
resulting contract is within the
statute of frauds.
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COMPLIANCE WITH
STATUTE OF FRAUDS
 General Contract Provisions – the
writing or writings must:
• Specify the parties to the contract.
• Specify the subject matter and essential
terms.
• Be signed by the party to be charged or
by her agent.
• ESTATE OF JACKSON V. DEVENYMS (1995).
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COMPLIANCE WITH
STATUTE OF FRAUDS
 Sale of Goods.
• Writing Must – (1)indicate that a
contract has been made between the
parties, (2)be signed by the party
against whom enforcement is sought
or by her authorized agent, and (3)specify the quantity of goods to be
sold. 
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COMPLIANCE WITH
STATUTE OF FRAUDS
 Sale of Goods.
• Written Confirmation – between
merchants, a written confirmation that
is sufficient against the sender is also
sufficient against the recipient unless
the recipient gives written notice of his
objection within ten days.
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EFFECT OF NONCOMPLIANCE
 Oral Contract within Statute of
Frauds – is unenforceable.
 Full Performance – statute does not
apply to executed contracts.
 Restitution –available in quasi
contract for benefits conferred in
reliance on oral contract. 
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EFFECT OF NONCOMPLIANCE
 Promissory Estoppel – oral contracts
will be enforced where the party
seeking enforcement has reasonably
and justifiably relied on the promise
and the court can avoid injustice only
by enforcement.
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PAROL EVIDENCE RULE
 The Rule – when parties intend a
written contract to be the complete
and final expression of their rights and
duties, evidence of prior or
contemporaneous oral or written
negotiations are not admissible.
• JENKINS V. ECKERD CORPORATION (2005).
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PAROL EVIDENCE RULE
Written contract?
Yes
Integrated contract?
Yes
Evidence prior or contemporaneous?
Yes
Evidence varies contract?
No
No
No
No
Yes
Evidence provides fraud, misrepresentation,
undue influence, mistake, duress, incapacity,
illegality, or unconscionability?
Parol
Evidence
Rule Does
Not Apply:
Evidence Is
Admissible
Yes
No
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Continues on next slide...
PAROL EVIDENCE RULE
No
Evidence of a condition precedent?
No
Evidence explains an ambiguity?
No
Evidence of a clerical error?
Yes
Yes
Yes
No
Parol Evidence Rule Applies:
Evidence Is Not Admissible
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Parol
Evidence
Rule Does
Not Apply:
Evidence Is
Admissible
SITUATIONS TO WHICH THE
RULE DOES NOT APPLY
 A contract that is partly written, not an
integrated document.
 Correction of a typographical error.
 Lack of contractual capacity.
 A defense of fraud, misrepresentation,
duress, undue influence, mistake,
illegality, lack of consideration or other
defense. 
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SITUATIONS TO WHICH THE
RULE DOES NOT APPLY
 A condition precedent to which parties
orally agreed.
 Subsequent mutual rescission or
modification of a written contract.
 Parol evidence can be used to explain
ambiguous terms.
 A separate contract.
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SITUATIONS TO WHICH THE
RULE DOES NOT APPLY
 Course of Dealing: previous conduct
that court may consider as common
basis of understand.
 Usage of Trade: regularly observed
and followed in vocation, place, or
trade.
 Course of Performance: no objection
to previous tenders of performance.
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INTERPRETATION OF CONTRACTS
 All the circumstances are
considered and the principal
purpose of the parties is given the
greatest weight.
 A writing is interpreted as a whole.
 Commonly accepted meanings are
used unless the parties manifest a
different intention. 
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INTERPRETATION OF CONTRACTS
 Wherever possible, the intentions
of the parties are interpreted as
consistent with each other and
with course of performance, course
of dealing, or usage of trade. 
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INTERPRETATION OF CONTRACTS
 Technical terms are given their
technical meaning.
 Specific terms are given greater
weight than general language.
 Separately negotiated terms are
given greater weight than
standardized terms or those not
separately negotiated. 
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INTERPRETATION OF CONTRACTS
 The order for interpretation is:
express terms, course of
performance, course of dealing,
and usage of trade.
 Where a term has several possible
meanings, the term will be
interpreted against the party who
supplied the contract or term. 
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INTERPRETATION OF CONTRACTS
 Written provisions are given preference
over typed or printed provisions, and
typed provisions are given preference
over printed provisions.
 If an amount is set forth in both words
and differing figures, words control
figures.
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INTERPRETATION OF CONTRACTS
 Where a term has several possible
meanings, the term will be
interpreted against the party who
supplied the contract or term.
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