Chapter 8

The Original Act for the Prevention of Fraud and Perjuries – England 1677

Statute of Frauds maybe waived by admission of a written agreement. Or failure to assert it as a defense in court ; may not be raised after the contract has been performed by both parties or if one party has raised it; or when it is admitted that an agreement exists

Even if its not enforceable, some states allow recovery based on the principle of estoppel or quasi contract

Formal agreement or an integrated document is not necessary.

Written evidence other than a written agreement presented by the party being charged is sufficient; writing on a napkin will suffice.

need not even be fully signed. Just a mere initial should suffice.

Should state, the identity of the parties, subject matter and the terms

Disadvantages of online contracts; better if face to face; reputation involved. Some use third party services like escrow services

Electronic signature in online contracts

Electronic contracts may satisfy the requirement of statute of frauds.

Contracts involving land – sales, leases for more than a year, mortgages and options on land, and easements

Sale of goods for $500 or more ; UCC does not cover contracts for services such as employment

Collateral promises – Estate and Suretyship (MYLEGS)

An executor is not normally liable for the debts of the estate so a promise to assume debts should be in writing

Performance bond – surety agreement that guarantees that a contract will be performed

Payment bond – surety agreement that guarantees that the contractor will make full payment

Maintenance bond – assures that a project will remain free of defects in workmanship or materials

If the promise is collateral, liable only if son does not pay – collateral

If DAD is primarily liable as a co-signer the agreement will not fall under statute of frauds

• Collateral promise – Promise to guarantee the debt of another, made without benefit to the party making the promise.

Guarantor

Agrees to be responsible for another’s debt or performance under a contract if the other fails to pay or perform; see Surety

Security Interests

Interest in personal property to secure performance of an obligation; evidence of indebtedness

Default

Fail to meet obligations

Co-Signer

One who participates jointly in borrowing

Surety

Liable for the payment of another’s debt or the performance of another’s obligation; see Guarantor

Executor

One who carries on the business of an estate; see Administrator

Waived

Claims have been abandoned

Party to be charged

Party attempting to avoid contract liability

Ante-nuptial

Agreement in anticipation of marriage; typically involves a promise to convey property when marriage occurs or concerns division of property in the event of a divorce; see Pre-nuptial

Pre-nuptial

Agreement in anticipation of marriage; typically involves a promise to convey property when marriage occurs or concerns division of property in the event of a divorce; see Ante-nuptial

Negotiable Instruments

A promise or order to pay, such as a check; can be passed along like cash

Collateral

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default

Click Wrap Agreement

Agreement used in connection with software licenses; often found on the Internet as part of the installation process of software packages; usually requires user to manifest assent by clicking an “ok” button on a dialog box or pop-up window

Affirmative Defense

Part of an answer to a complaint in which defendant attempts to limit or excuse liability, based on facts outside those claimed by plaintiff

Estate’

The entity for managing finances of a deceased person, or an incompetent

Integrated Agreement

Agreement that is intended to be final and complete

Easement

Limited right to use real property

Administrator

One who carries on the business of an estate; see Executor