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

Why 1677? Party on, dudes! 2

Why 1677? o Juries as fact-finders o Interested parties not admissible as witnesses 3

Why 1677? o Juries as fact-finders o Interested parties not admissible as witnesses o And that made the Statute of Frauds necessary because…. ? 4

Why 1677? o Juries as fact-finders o Interested parties not admissible as witnesses o And that made the Statute of Frauds necessary because…. ? n And if it did, why do we need it now? 5

The Statute of Frauds What’s its Purpose? Mc. Intosh 6

The Statute of Frauds What’s its Purpose? Mc. Intosh o Evidentiary n Antifraud 7

The Statute of Frauds What’s its Purpose? Mc. Intosh o Evidentiary n Antifraud o Cautionary n Reflects seriousness of contracting 8

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 9

The Statute of Frauds What’s its Purpose? Mc. Intosh o Evidentiary o Cautionary o Channeling o 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 o Marriage n The old action for breach of promise 12

The Statute of Frauds o Marriage n Restatement § 124 o A promises to settle Blackacre upon B when she marries C? 13

The Statute of Frauds o Marriage n Restatement § 124 o Illustrations 1, 3, 5 14

The Statute of Frauds o Marriage n Restatement § 124 o Illustrations 1, 3, 5 n Restatement § 90(2) o Illustration 18 15

The Statute of Frauds o Marriage o Promises not to be performed within One Year n Restatement § 110(1)(e) 16

The Statute of Frauds o Marriage o Promises not to be performed within One Year n What kind of promises were these in 1677? 17

The Statute of Frauds o Marriage o Promises not to be performed within One Year n What is the rationale for the rule? 18

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? 19

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? 20

The Statute of Frauds o Marriage o Promises not to be performed within One Year o Land n 110(1)(d) 21 “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 22

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 23

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 -14 24

Suretyship Obligee Principal (obligor) 25

Suretyship Obligee (promisee) Surety (promisor) 26 Principal (obligor)

Colonial Finance in Virginia 27

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 28

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? 29

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 30

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 31

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 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? o “Not to be performed within one year from the making thereof” n 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? o “Not to be performed within one year from the making thereof” n I ask you to work for me on January 10, 2010, with the expectation that the work will be completed by January 10, 2011 o Restatement § 130 35

How does the one-year rule work? o “Not to be performed within one year from the making thereof” n I ask you to work for me on January 10, 2010, with the expectation that the work MIGHT be completed by January 10, 2011 o Restatement § 130 36

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. 37

Mc. Intosh o What is estoppel? And promissory estoppel? 38

Mc. Intosh o Restatement § 139 n Promisor should expect reliance n Promisee does rely n Non-enforcement would be unjust o Cf. Restatement § 90 39

Mc. Intosh o What kind of recovery for Mc. Intosh? 40

Was Mc. Intosh a proper case for estoppel? What do you think would have happened if Mc. Intosh had asked for a written contract? 41

Was Mc. Intosh a proper case for estoppel? If you’re Murphy, how do you react to the decision? 42

Is land different? o What do real estate agents make you do if you want to buy a house? 43

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 44

What happened in Schwedes? Swan River MT 45

What happened in Schwedes? o Sale by seller--No real estate agent 46

What happened in Schwedes? o Sale by seller--No real estate agent n What, if anything, constituted promisee reliance? 47

What happened in Schwedes? o Sale by seller--No real estate agent n What, if anything, constituted promisee reliance? o Securing financing? 48

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? 49

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? 50

Psychic Reliance Costs But when the cheque bounces tomorrow… Happy, Joy, Joy 51

Estoppel o Why was a defense of promissory estoppel explicitly rejected in Schwedes? n Restatement § 139 52

Part Performance o Cf. Restatement § 129 n Buyer gives seller purchase price. Can buyer have specific performance? 53

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) 54

Lawyer’s Ethical Duties o Should Hoover have disclosed that the sellers were dickering with another purchaser? 55

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… 56

Lawyer’s Ethical Duties o What about saying that sending the payment was unnecessary? 57

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. 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” 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 61

The “note or memorandum in writing” o Compare UCC § 2 -201(1) n Signed by or on behalf of the party to be charged n Evidences existence of a contract n But not above quantity of goods shown in the writing 62

A trap for the unwary? 63

Monetti Melform products 64

Monetti o How was the first writing “signed” in Monetti? 65

Monetti o How was the first writing “signed” in Monetti? n Typed initials “SS” on Steve Schneider’s draft terms 66

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 67

Monetti o How was the first writing “signed” in Monetti? n Typed initials “SS” n Did it matter that this was a precontractual draft? 68

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: how to tell them apart? 69

Monetti o What about the internal memo by Raymond Davis? 70

Monetti o What about the internal memo? n Δ’s letterhead suffices n How did Π obtain this? 71

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? 72

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 (? ) 73

Monetti o What was the part performance? n Restatement §§ 139, 145 n UCC § 2 -201(3)(c) o Does this mean the agreement is enforceable? 74

When does Art. 2 apply? o A sale of inventory or a distributorship agreement? n UCC § 2 -102 n A general or a nominate contract? 75

George Mason School of Law Contracts I Unconscionability F. H. Buckley fbuckley@gmu. edu 76