George Mason School of Law Contracts I Statute

George Mason School of Law Contracts I Statute of Frauds F. H. Buckley fbuckley@gmu. edu 1

Next day o Restatement §§ 1 -4, 9, 17 -24 o Scott 201 -05, 4 -23 2

Balance of term o Offer and Acceptance o Consideration 3

The Statute of Frauds Sometimes the law is like Pericles, sometimes like a plumber 4

The Statute of Frauds: Why 1677? Party on, dudes! 5

Why 1677? o Juries as fact-finders o Interested parties not admissible as witnesses 6

Why 1677? o Juries as fact-finders o Interested parties not admissible as witnesses o If that made the Statute of Frauds necessary then, why do we need it now? 7

What is the sanction for noncompliance? o Restatement § 110(1): not enforceable absent a note or memorandum in writing o UCC § 2 -201 8

The problem: A trap for the unwary? 9

The Statute of Frauds What’s its Purpose? Mc. Intosh 10

The Statute of Frauds What’s its Purpose? Mc. Intosh o Evidentiary n Antifraud 11

The Statute of Frauds What’s its Purpose? Mc. Intosh o Evidentiary n Antifraud o Cautionary n Reflects seriousness of contracting 12

The Statute of Frauds What’s its Purpose? Mc. Intosh o Evidentiary n Antifraud o Cautionary n Reflects seriousness of contracting o Channeling n Distinguishing enforceable contracts 13

The Statute of Frauds What’s its Purpose? Mc. Intosh o Evidentiary n Antifraud o Cautionary n Reflects seriousness of contracting o Channeling n Distinguishing enforceable contracts o [Economizing on court costs? ] 14

So when would we want to require a writing? o What do the categories of Restatement § 110 tell us? 15

The Statute of Frauds What’s its Purpose? Mc. Intosh o Major Contracts o Possibility of a ill-considered promise 16

The Statute of Frauds o Marriage Settlements n The old action for breach of promise 17

The Statute of Frauds o Marriage Settlements n Restatement §§ 110(1)(c), 124 18

The Statute of Frauds o Marriage Settlements n Restatement §§ 110(1)(c), 124 o A promises to settle Blackacre upon B when she marries A: Illustration 1 n How is this different from breach of promise? 19

The Statute of Frauds o Marriage Settlements n Restatement §§ 110(1)(c), 124 o A promises to settle Blackacre upon B when she marries A: Illustration 1 n How is this different from breach of promise? § Cf. the proviso to § 124 20

The Statute of Frauds o Marriage Settlements n Restatement §§ 110(1)(c), 124 o A promises to settle Blackacre upon B when she marries A: Illustration 1 n What does the reference to “consideration” exclude? 21

The Statute of Frauds o Marriage Settlements n Restatement §§ 110(1)(c), 124 o A promises to settle Blackacre upon B when she marries A: Illustration 1 n What does the reference to “consideration” exclude? § Cf. illustration 5 22

The Statute of Frauds o Marriage Settlements n Suppose the parties do get married. Is that sufficient reliance under Restatement § 124? o Cf. comment d 23

The Statute of Frauds o Marriage o Promises not to be performed within One Year n Restatement § 110(1)(e) 24

The Statute of Frauds o Marriage o Promises not to be performed within One Year n What is the rationale for the rule? 25

The Statute of Frauds o Marriage o Promises not to be performed within One Year n What is the rationale for the rule? o An aide-memoire? o Or a significant contract? 26

The Statute of Frauds o Marriage o Promises not to be performed within One Year n What is the rationale for the rule? o An aide-memoire? o Or a significant contract? o Do you agree with Farnsworth? 27

The Statute of Frauds o Marriage o Promises not to be performed within One Year o Land n 110(1)(d) 28 “Tis the only thing worth fighting for, worth dying for”

The Statute of Frauds o Marriage o Promises not to be performed within One Year o Land o Executor’s Assumption of Liability n Restatement § 110(1)(a) n No new consideration needed 29

The Statute of Frauds o Marriage o Promises not to be performed within One Year o Land o Executor’s Assumption of Liability o Goods worth more than [$500] n Restatement § 110(2)(a) → UCC § 2 -201 30

Restatement § 110 ff, UCC § 2 -201 o Marriage o Promises not to be performed within One Year o Land o Executor’s Assumption of Liability o Goods worth more than [$500] o Suretyship Agreements n Restatement § 112 31

Suretyship Obligee Principal (obligor) 32

Suretyship Obligee (promisee) Surety for Principal (promisor) Principal (obligor) Assumes a prior obligation by obligor to obligee 33

MY LEGS o Marriage o Promises not to be performed within One Year o Land o Executor’s Assumption of Liability o Goods worth more than [$500] o Suretyship Agreements 34

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n What does the Π have to assert to win in Mc. Intosh? 35

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n What does the Π have to assert to win in Mc. Intosh? o Not terminable at will, but for a fixed term 36

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n What does the Π have to assert to win in Mc. Intosh? o Not terminable at will, but for a fixed term o What term might be n Gee, let’s say one year 37

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n What does the Π have to assert to win in Mc. Intosh? o Not terminable at will, but for a fixed term o What term might be o But then Δ asserts the promise is not unenforceable by virtue of the Statute of Frauds 38

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n It’s November 1, 2011. I ask you to work for me from January 10, 2012 until January 10, 2013 39

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n It’s November 1, 2011. I ask you to work for me from January 10, 2012 until January 10, 2013 o Restatement § 130 40

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n It’s November 1, 2011. I ask you to work for me beginning on January 10, 2012, with the expectation that the work MIGHT be completed by January 10, 2013 41

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n It’s November 1, 2011. I ask you to work for me beginning on January 10, 2012, with the expectation that the work MIGHT be completed by January 10, 2013 o Restatement § 130: cannot be performed 42

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n I insure your house against fire for five years without a writing. Three years have elapsed. o Restatement § 130, illustration 1. 43

Mc. Intosh o What is estoppel? And promissory estoppel? 44

Mc. Intosh o Restatement § 139 n Promisor should expect reliance n Promisee does rely n Non-enforcement would be unjust o Cf. Restatement § 90 re consideration 45

Was Mc. Intosh a proper case for estoppel? What do you think would have happened if Mc. Intosh had asked for a written contract? 46

Are salesmen given tenure? Ron Popeil and the Veg-o-matic 47

Was Mc. Intosh a proper case for estoppel? If you’re Murphy, how do you react to the decision? 48

Was Mc. Intosh a proper case for estoppel? Should estoppel mimic the bargain the parties would likely have struck? 49

Is land different? o What do real estate agents make you do if you want to buy a house? 50

Is land different? o What do real estate agents make you do if you want to buy a house? n Written offers throughout n Closing 51

Is land different? o Restatement § 125 n Contracts to buy or sell land, not leaseholds 52

What happened in Schwedes? Swan River MT 53

What happened in Schwedes? o Sale by seller--No real estate agent 54

What happened in Schwedes? o Sale by seller--No real estate agent n What, if anything, constituted promisee reliance? 55

What happened in Schwedes? o Sale by seller--No real estate agent n What, if anything, constituted promisee reliance? o Securing financing? 56

What happened in Schwedes? o Sale by seller--No real estate agent n What, if anything, constituted promisee reliance? o Securing financing? o The offer to send the purchase price? 57

What happened in Schwedes? o Sale by seller--No real estate agent n What, if anything, constituted promisee reliance? o Securing financing? o The offer to send the purchase price? o Psychic reliance? 58

Psychic Reliance Costs But when the cheque bounces tomorrow… Happy, Joy, Joy 59

Estoppel o Why was a defense of promissory estoppel explicitly rejected in Schwedes? n Restatement § 139 60

Part Performance o Cf. Restatement § 129 n Buyer gives seller purchase price. Can buyer have specific performance? 61

Can you distinguish Schwedes from Mc. Intosh? o But cf. Restatement § 129 n Buyer gives seller purchase price. Can buyer have specific performance? o Cf. Illustration 1 o Contrast Illustration 3 o Restatement § 139(2)(a) 62

Lawyer’s Ethical Duties o Should Hoover have disclosed that the sellers were dickering with another purchaser? 63

Lawyer’s Ethical Duties o Should Hoover have disclosed that the sellers were dickering with another purchaser? n MRPR § 1. 6 A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent… 64

Lawyer’s Ethical Duties o What about saying that sending the payment was unnecessary? 65

Lawyer’s Ethical Duties o What about saying that sending the payment was unnecessary? n 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. 66

The “note or memorandum in writing” o Restatement §§ 110, 131 n Signed by or on behalf of the party to be charged n Specifies subject matter n Evidences existence of a contract n Essential terms 67

The “note or memorandum in writing” o Restatement §§ 110, 131 n What is a signature? o Cf. Illustration 2 68

The “note or memorandum in writing” o Restatement §§ 110, 131 n What is a signature? o Cf. Illustration 2 o Cf. Restatement § 134, illustrations 1 and 3 69

The “note or memorandum in writing” o Compare UCC § 2 -201(1) n Evidences existence of a contract n Signed by or on behalf of the party to be charged n But not above quantity of goods shown in the writing 70

Monetti Melform products 71

Monetti o How was this within the So. F? 72

Monetti o How was this within the So. F? n One year n Sale of Goods? 73

Monetti o How was this within the So. F? n One year n Sale of Goods? n Why might it matter which it is? 74

Monetti o In what sense is this not like a sale of goods? n Cf. UCC 2 -105(1) 75

Monetti o In what sense is this not like a sale of goods? n Cf. UCC 2 -105(1) o Sale of goods or distributorship agreement? n Which one fits better (predominant purpose)? n Both statutes? n A mixed contract (pick and choose)? 76

Monetti o Who is the party to be charged? 77

Monetti o How was the first writing “signed” by Anchor? 78

Monetti o How was the first writing “signed” by Anchor? n Typed initials “SS” on Steve Schneider’s draft “Topics for Discussion” 79

Monetti o How was the first writing “signed” in Monetti? n Typed initials “SS” o UCC § 1 -201(37) Signed “includes any symbol executed or adopted by a party with present intention to adopt or accept a writing. ” o Restatement § 134, illustration 3 80

Monetti o How was the first writing “signed” by Anchor? n Typed initials “SS” n Did it matter that this was a precontractual draft? 81

Monetti o How was the first writing “signed” in Monetti? n Typed initials “SS” n Did it matter that this was a precontractual draft? o Restatement § 136 o Posner’s three cases on 529: how to tell them apart? 82

Monetti o How was the first writing “signed” in Monetti? n Posner’s three cases on 529 o UCC 2 -201: “a contract for sale has been made: 83

Monetti o What about the internal “summary agreement” by Raymond Davis? 84

Monetti o What about the internal memo? n Δ’s letterhead suffices n How did Π obtain this? 85

The “note or memorandum in writing” o What about the internal memo? n Δ’s letterhead suffices n How did Π obtain this? n Is Restatement § 132 applicable? 86

The “note or memorandum in writing” o What about the internal memo? n Δ’s letterhead suffices n How did Π obtain this? n Is Restatement § 132 applicable? o Posner: they don’t refer to each other (530) o Posner: “we are permitted to connect them” (532) 87

Monetti o What was the part performance? n Restatement §§ 139(2)(b), 145 n UCC § 2 -201(3)(c) 88

George Mason School of Law Contracts I Unconscionability F. H. Buckley fbuckley@gmu. edu 89