Chapter 14. Writing and E-Commerce Signature Law

Chapter Objectives
List the contracts that must be in writing under the Statute of Frauds.
Explain the effect of noncompliance with the Statute of Frauds.
Apply the Statute of Frauds to contracts for the sale of land and the part performance exception to this rule.
Apply the Statute of Frauds to contracts that cannot be performed within one year.
Define guaranty contracts and explain when they must be in writing.
Identify when agents' contracts must be in writing.
Describe the Statute of Frauds applicable to the sale of goods.
Define and apply the doctrine of promissory estoppel.
Define and describe the effects of an integration clause.
Apply the parol evidence rule.
Describe writing requirements for international contracts.

Contracts that must be in writing under the Statute of Frauds
Under the Statute of Frauds, many states require the following types of contracts to be in writing:

Noncompliance with the Statute of Frauds
Generally, an executory contract that is not in writing even though the Statute of Frauds requires it to be is unenforceable by either party.

Statute of Frauds and contracts for the sale of land
Contracts that transfer an ownership interest in real property must be in writing under the Statute of Frauds to be enforceable. Real property includes the land itself as well as buildings, trees, soil, minerals, timber, plants, crops, and other things permanently affixed to the land. Fixtures, personal property that is permanently affixed to real property, such as built-in cabinets in a house, become part of real property. Contracts involving most other interests in real property, such as mortgages, leases, life estates, and easements, must be in writing.

Statute of Frauds and contracts that cannot be performed within one year
To prevent contract disputes that may occur toward the end of a long-term contract, contracts that cannot be performed within one year, by the contracts own terms, must be in writing. If the performance of the contract is possible within one year, the contract may be oral.

Guaranty contracts
A guaranty contract or collateral contract occurs where one person agrees to answer for the debts or duties of another person. Collateral promises must be in writing under the Statute of Frauds.

Agents' contracts
Many states require that agent's contracts to sell property covered by the Statute of Frauds must be in writing to be enforceable. This is called the equal dignity rule.

Statute of Frauds and the sale of goods
Contracts for the sale of goods costing $500 or more must be in writing under section 201 of the Uniform Commercial Code Statute of Frauds.

Promissory estoppel
Promissory estoppel is an equitable doctrine that permits enforcement of oral contracts that should have been in writing. The following conditions must be met:

Integration clauses
The signature of the party against whom enforcement is sought needs to be on the written contract. Several writings can be integrated to form a single contract. Integration can be by express reference or may be implied from the circumstances.

Standards of interpretation

Parol evidence rule
Oral or written words outside the contract are called parol evidence. Under the parol evidence rule, if a written contract is a complete and final statement of the parties agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract.

Exceptions to the parol evidence rule
Parol evidence may be admitted if it:


Internet Links
Legal Information Institute: http://www.law.cornell.edu/lexicon/statute_of_frauds.htm
Rain, Lloyd, The Statute of Frauds: Its Origins, Its Persistence, and its potential demise: http://www.naeb.org/Purchasing_Link/Commentaries/Nov2002_LR_Commentary.htm
Electronic Signature Legislation: http://profs.lp.findlaw.com/signatures/signature_4.html