George Mason School of Law
Contracts I
Statute of Frauds
F.H. Buckley
fbuckley@gmu.edu
1
Why 1677?
Party
on,
dudes!
2
Why 1677?
 Juries as fact-finders
 Interested parties not admissible as
witnesses
3
Why 1677?
 Juries as fact-finders
 Interested parties not admissible as
witnesses
 And that made the Statute of Frauds
necessary because….?
4
Why 1677?
 Juries as fact-finders
 Interested parties not admissible as
witnesses
 And that made the Statute of Frauds
necessary because….?
 And if it did, why do we need it now?
5
The Statute of Frauds
What’s its Purpose? McIntosh
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The Statute of Frauds
What’s its Purpose? McIntosh
 Evidentiary
 Antifraud
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The Statute of Frauds
What’s its Purpose? McIntosh
 Evidentiary
 Antifraud
 Cautionary
 Reflects seriousness of contracting
8
The Statute of Frauds
What’s its Purpose? McIntosh
 Evidentiary
 Antifraud
 Cautionary
 Reflects seriousness of contracting
 Channeling
 Distinguishing enforceable contracts
9
The Statute of Frauds
What’s its Purpose? McIntosh
 Evidentiary
 Cautionary
 Channeling
 Can you think of a fourth reason,
unconnected to the protection of the
parties?
10
A trap for the unwary?
11
The Statute of Frauds
 Marriage
 The old action for breach of promise
12
The Statute of Frauds
 Marriage
 Restatement § 124
 A promises to settle Blackacre upon B when
she marries C?
13
The Statute of Frauds
 Marriage
 Restatement § 124
 Illustrations 1, 3, 5
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The Statute of Frauds
 Marriage
 Restatement § 124
 Illustrations 1, 3, 5
 Restatement § 90(2)
 Illustration 18
15
The Statute of Frauds
 Marriage
 Promises not to be performed within
One Year
 Restatement § 110(1)(e)
16
The Statute of Frauds
 Marriage
 Promises not to be performed within
One Year
 What kind of promises were these in
1677?
17
The Statute of Frauds
 Marriage
 Promises not to be performed within
One Year
 What is the rationale for the rule?
18
The Statute of Frauds
 Marriage
 Promises not to be performed within
One Year
 What is the rationale for the rule?
 An aide-memoire?
 Or a significant contract?
19
The Statute of Frauds
 Marriage
 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?
20
The Statute of Frauds
 Marriage
 Promises not to be performed within
One Year
 Land
 110(1)(d)
21
“Tis the only thing worth
fighting for, worth dying for”
The Statute of Frauds
 Marriage
 Promises not to be performed within
One Year
 Land
 Executor’s Assumption of Liability
 Restatement § 110(1)(a)
 No new consideration needed
22
The Statute of Frauds
 Marriage
 Promises not to be performed within
One Year
 Land
 Executor’s Assumption of Liability
 Goods worth more than [$500]
 Restatement § 110(2)(a) → UCC § 2-201
23
Restatement § 110 ff, UCC § 2-201
 Marriage
 Promises not to be performed within
One Year
 Land
 Executor’s Assumption of Liability
 Goods worth more than [$500]
 Suretyship Agreements
 Restatement § 112-14
24
Suretyship
Obligee
Principal (obligor)
25
Suretyship
Obligee (promisee)
Surety (promisor)
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Principal (obligor)
Colonial Finance in Virginia
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MY LEGS
 Marriage
 Promises not to be performed within
One Year
 Land
 Executor’s Assumption of Liability
 Goods worth more than [$500]
 Suretyship Agreements
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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?
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
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
 Not unenforceable by virtue of the Statute
of Frauds
32
Do salesmen have tenure?
Ron Popeil and the Veg-o-matic
33
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 I ask you to work for me on January 10,
2010, with the expectation that the work
will be completed by January 10, 2011
34
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 I ask you to work for me on January 10,
2010, with the expectation that the work
will be completed by January 10, 2011
 Restatement § 130
35
How does the one-year rule work?
 “Not to be performed within one year
from the making thereof”
 I ask you to work for me on January 10,
2010, with the expectation that the work
MIGHT be completed by January 10, 2011
 Restatement § 130
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
McIntosh
 What is estoppel? And promissory
estoppel?
38
McIntosh
 Restatement § 139
 Promisor should expect reliance
 Promisee does rely
 Non-enforcement would be unjust
 Cf. Restatement § 90
39
McIntosh
 What kind of recovery for McIntosh?
40
Was McIntosh a proper case for estoppel?
What do you think would have
happened if McIntosh had asked
for a written contract?
41
Was McIntosh a proper case for estoppel?
If you’re Murphy, how do you
react to the decision?
42
Is land different?
 What do real estate agents make you
do if you want to buy a house?
43
Is land different?
 What do real estate agents make you
do if you want to buy a house?
 Written offers throughout
 Closing
44
What happened in Schwedes?
Swan River MT
45
What happened in Schwedes?
 Sale by seller--No real estate agent
46
What happened in Schwedes?
 Sale by seller--No real estate agent
 What, if anything, constituted promisee
reliance?
47
What happened in Schwedes?
 Sale by seller--No real estate agent
 What, if anything, constituted promisee
reliance?
 Securing financing?
48
What happened in Schwedes?
 Sale by seller--No real estate agent
 What, if anything, constituted promisee
reliance?
 Securing financing?
 The offer to send the purchase price?
49
What happened in Schwedes?
 Sale by seller--No real estate agent
 What, if anything, constituted promisee
reliance?
 Securing financing?
 The offer to send the purchase price?
 Psychic reliance?
50
Psychic Reliance Costs
But when the cheque bounces tomorrow…
Happy,
Happy,
Joy, Joy
51
Estoppel
 Why was a defense of promissory
estoppel explicitly rejected in Schwedes?
 Restatement § 139
52
Part Performance
 Cf. Restatement § 129
 Buyer gives seller purchase price. Can
buyer have specific performance?
53
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)
54
Lawyer’s Ethical Duties
 Should Hoover have disclosed that
the sellers were dickering with
another purchaser?
55
Lawyer’s Ethical Duties
 Should Hoover have disclosed that
the sellers were dickering with
another purchaser?
 MRPR § 1.6
A lawyer shall not reveal
information relating to the representation of a client
unless the client gives informed consent…
56
Lawyer’s Ethical Duties
 What about saying that sending the
payment was unnecessary?
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Lawyer’s Ethical Duties
 What about saying that sending the
payment was unnecessary?
 MRPR § 4.3
The lawyer shall not give legal
advice to an unrepresented person, other than the
advice to secure counsel, if the lawyer knows or
reasonably should know that the interests of such a
person are or have a reasonable possibility of being in
conflict with the interests of the client.
58
George Mason School of Law
Contracts I
Statute of Frauds
F.H. Buckley
fbuckley@gmu.edu
59
Next day
Restatement §§ 1-4, 9, 17-24
Scott 201-05, 4-23
Restatement §§ 26, 33
Scott 205-15
60
The “note or memorandum in writing”
 Restatement §§ 110, 131
 Signed by or on behalf of the party to be
charged
 Specifies subject matter
 Evidences existence of a contract
 Essential terms
61
The “note or memorandum in writing”
 Compare UCC § 2-201(1)
 Signed by or on behalf of the party to be
charged
 Evidences existence of a contract
 But not above quantity of goods shown
in the writing
62
A trap for the unwary?
63
Monetti
Melform products
64
Monetti
 How was the first writing “signed” in
Monetti?
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Monetti
 How was the first writing “signed” in
Monetti?
 Typed initials “SS” on Steve Schneider’s
draft terms
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Monetti
 How was the first writing “signed” in
Monetti?
 Typed initials “SS”
 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, illustration 3
67
Monetti
 How was the first writing “signed” in
Monetti?
 Typed initials “SS”
 Did it matter that this was a precontractual draft?
68
Monetti
 How was the first writing “signed” in
Monetti?
 Typed initials “SS”
 Did it matter that this was a precontractual draft?
 Restatement § 136
 Posner’s three cases: how to tell them
apart?
69
Monetti
 What about the internal memo by
Raymond Davis?
70
Monetti
 What about the internal memo?
 Δ’s letterhead suffices
 How did Π obtain this?
71
The “note or memorandum in writing”
 What about the internal memo?
 Δ’s letterhead suffices
 How did Π obtain this?
 Is Restatement § 132 applicable?
72
The “note or memorandum in writing”
 What about the internal memo?
 Δ’s letterhead suffices
 How did Π obtain this?
 Is Restatement § 132 applicable?
 Posner: they don’t refer to each other (?)
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Monetti
 What was the part performance?
 Restatement §§ 139, 145
 UCC § 2-201(3)(c)
 Does this mean the agreement is
enforceable?
74
When does Art. 2 apply?
 A sale of inventory or a
distributorship agreement?
 UCC § 2-102
 A general or a nominate contract?
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George Mason School of Law
Contracts I
Unconscionability
F.H. Buckley
fbuckley@gmu.edu
76