Part I

Review

Mutuality

There must be a binding promise by both parties

Requirements and Output revisited

The consideration is the forgoing the right to buy or sell from another party.

Issues

• Conditional promises
  • conditioned on satisfaction
• Right to Cancel or Withdraw
• Exclusivity

Issues Continued

• Voidable Promises
• Suretyship
  • before or concurrent to promise or performance
  • after promise or performance
• alternate courses

Promissory Estoppel

Detrimental Reliance

Prevents a party from arguing the existence of a valid contract, where: 1) promisor makes representations inducing reliance; 2) promisee actually and reasonably relies on the representation to their detriment; 3) injustice would otherwise result if not enforced.

Promissory Estoppel

Is considered a substitute for consideration

Typically the party in reliance hasn't promised any consideration

Part II

Defenses to Formation

There are a number of ways to attack formation. As we mentioned early in the quarter, the Statute of Limitations (CivPro) and the Statute of Frauds are two extraneous defences that will lead to an Unenforceable Contract

Statute of Frauds (SOF)

To be valid, certain contracts must be evidenced by a writing and signed by the party that the contract is being enforced against. Contracts in consideration for marriage, contracts that will take more than a year to complete, contracts for interests in land, contracts for executors to personally pay estate debts, contracts for the sale of goods for $500 or more, and contracts for sureties to pay the debt of another fall under the Statute of Frauds.

Mnemonic for types

We used the mnemonic MYLEGS.

marriage consideration, year or more, land interests, executor personal, goods of 500 or more, surety contracts.

Signed Writing

Remember that the courts will find many things to be a signed writing: letterhead, email from a company domain, a signed check, etc. Read facts carefully, and argue, sometimes both ways, as needed (discuss this week's cases at end).

Essential or Material Terms

There needs to be enough in the writing to determine terms of the contract. Like with Offer, common law requires more than UCC.

Look back to Lucy v. Zehmer

Marriage Consideration

Not for marriage itself, but for promises to induce marriage.

Year or More to Perform

By its terms cannot be performed in a year.

• Express: five year contract
• Implied: no reasonable way to complete in a year

Effective date runs from agreement not performance

• agreements that don't fall into SOF (list in barbri)

Land Interests

Sales of Real Property. Also

• Leases for more than a year
• Easements for more than a year
• Mortgages and most security liens
• Fixtures, mineral, structures severed by buyer
  • discuss difference between goods and the above
• Subject matter tangentially related to land don't come into SOF

Executor Promise to Personally Pay

This is only for contracts where an executor promises to pay estate debts out of their own funds.

Goods of $500 or more

Quantity essential, subject matter need to be discernable. Courts will enforce up to the quantity in the writing. We'll return to this when looking at things that remove contracts from SOF.

Also, watch on things like modification.

Surety to Pay Debt of Another

Recall we discussed what surety is under consideration. Can be from tort or contract. Must be collateral to another party's promise to pay.

Main Purpose must not be pecuniary to promisor

If promise is own interest, takes out of SOF.

SPMFRS

Removing from SOF

Sufficient Memorandum
Part Performance
Main Purpose Doctrine
Full Performance
Receipt of Goods
Speciality Manufactured Goods

Land

Full Performance (conveyance of title)

Part Performance generally requires at least two of

• Payment (full or partial)
• Possession
• Valuable Improvements

Goods

• Speciality Manufactured Goods, where a substantial beginning or commitment is already made
• Payment or Delivery of Goods up to quantity received or payed for if goods are divisible
• Confirmatory Memo Rule memorializing an oral agreement where recipient has reason to know content, does not object in writing within 10 days
• Prior Admission in Pleadings or Court (this works for other SOF too)

Remedies If Unenforceable

If a contract is unenforceable because of SOF, then equitable remedies like restitution or quantum meruit are available to prevent unjust enrichment.

Part III

Cases, then Questions and Answers.

Our cases this week

Ehrlich v. Diggs

Crabtree v. Elizabeth Arden Sales Corp.

Cohn v. Fisher

@peoplescollolaw