Bài giảng Business Law (13th edition) - Chapter 16: Writing

ContractsIntroduction to ContractsThe Agreement: OfferThe Agreement: AcceptanceConsiderationReality of Consent3McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.ContractsCapacity to ContractIllegalityWritingRights of Third PartiesPerformance & Remedies3McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.WritingPAETRHC16“A verbal contract isn’t worth the paper it’s written on.” Samuel Goldwyn, quoted in The Great Goldwyn (Alva Johnson, 1937)Learning ObjectivesSignificance of a writing in contract lawThe Statute of FraudsContracts covered by the Statute of Frauds and the requirementsThe UCC & the Statute of FraudsThe Parole Evidence Rule16 - *In general, a writing is not required to create a legally enforceable contractWriting may be required by Statute of FraudsEnacted in 17th century England to prevent fraud by requiring written evidenceAmerican states adopted similar statutesA contract is unenforceable if it does not satisfy the statute of fraudsBasics16 - *Collateral contractsContracts for real estateContracts for more than one yearContracts for sale of goods over $500Executor’s promiseMarriage as considerationCovered Contracts16 - *House of Lords, EnglandCollateral contracts in which a guarantor promises to perform an obligation of a principal debtor to a third person (obligee)Exception: under the main purpose or leading object rule, no writing required if guarantor makes a collateral promise for main purpose of obtaining personal economic advantageSee Wintersport Ltd. v. Millionaire.com, Inc.Collateral Contracts16 - *A writing is required for contracts for the transfer or sale of an interest in real estateSome states require a writing for leases and certain easements on real propertyReal Estate & Sale of Goods16 - *UCC 2-201 requires a writing for contracts for the sale of goods for a price of $500 or moreA writing is required for bilateral contracts that cannot be performed within a year from the date of their formation (one year rule)Likelihood of full performance is irrelevantTest: is performance possible within year?Example: If Jack signs contract to consult with Company X on a 13 month project, the contract must be in writing to be enforceableThe One Year Rule 16 - *Most states require signed memorandum of parties’ agreement stating essential terms:(a) identity of parties, (b) subject matter identified with reasonable certainty, and (c) signed by the party to be chargedNeed not be made at time contract is madeConvention on International Sale of Goods does not require writing to enforce a contractSatisfying the Statute of Frauds16 - *Parol evidence rule provides that, when parties enter a written contract they intend as a complete integration (final statement of agreement), a court will not allow evidence of prior or contemporaneous statements to alter or contradict terms of written contractParol evidence is admissible to explain ambiguities or allegations of fraudThe Parol Evidence Rule16 - *Test Your KnowledgeTrue=A, False = BAll contracts must be in writing to be enforceable. A contract for the sale of a carpet for $499 must be in writing to be enforceable.Jill orally promised the President of First Bank to pay Jack’s debt to First Bank if Jack defaulted on the note. Jack defaulted and Jill must pay Jack’s debt. 16 - *Test Your KnowledgeTrue=A, False = BJoey owes Chandler money, so Joey contracts with LoanCo for a short-term loan. Chandler orally gave his personal guaranty to LoanCo that Joey would repay the loan. Joey defaulted and Chandler must repay the loan for Joey. 16 - *Test Your KnowledgeMultiple ChoiceParol evidence refers to: (a) The evidence required to prove a case(b) Written or spoken statements not contained in the written contract(c) The lack of evidence16 - *Test Your KnowledgeMultiple ChoiceMamie agreed to sell Susan her Picasso painting. She wrote the name of the painting and $600 on a napkin. Both Mamie & Susan signed the napkin. Susan paid Mamie the money and Mamie:(a) May refuse to hand over the painting since contract was on a napkin and is unenforceable(b) Must give Susan the painting since the contract satisfies the statute of frauds16 - *Thought QuestionDoes the Statute of Frauds – a legal principle from the 1600s – still make sense in today’s commercial world? 16 - *