Statute of frauds - Next Generation Bar Exam

1. Under what circumstances does part performance take an oral land contract outside the statute of frauds?

   When the buyer's acts, such as possession plus payment or improvements, unequivocally point to the contract. Jurisdictions differ on which acts suffice, but possession combined with payment or improvements is the core test.

2. Under the main purpose rule, when is a promise to pay another's debt outside the statute of frauds?

   When the promisor's main purpose is to serve its own economic interest. A promise made primarily for the promisor's benefit is treated as an original undertaking, not a suretyship.

3. A parent orally promises a bank to pay the child's loan if the child defaults. Why is the promise within the statute of frauds?

   It is a suretyship: a promise to answer for the debt of another. The parent's promise is collateral to the child's primary obligation.

4. What must a writing contain to satisfy the common-law statute of frauds?

   The essential terms, signed by the party against whom enforcement is sought. The writing may consist of several documents read together.

5. Which contracts fall within the one-year provision of the statute of frauds?

   Contracts that by their terms cannot be performed within one year of their making. The test is whether performance within a year is possible, not whether it is likely.

6. Which contracts fall within the common-law statute of frauds?

   Contracts in consideration of marriage, suretyships, land interests, those not performable within a year, and executor promises. The UCC adds contracts for the sale of goods for $500 or more.

7. The parties orally agree to the sale of 1,000 widgets at $1 each, but the seller's signed memorandum states 500 widgets. To what extent is the contract enforceable against the seller?

   Up to 500 widgets. Under UCC 2-201, the contract is not enforceable beyond the quantity shown in the writing.

8. Why is a contract for lifetime employment outside the one-year provision?

   It could be fully performed within a year if the employee died. Because performance within a year is possible, the contract need not be in writing.

9. Under UCC 2-201, what term must a writing for the sale of goods state?

   The quantity. The contract is enforceable only up to the quantity shown in the writing.

10. Under what doctrine do many courts enforce an oral promise despite the statute of frauds where reliance makes enforcement necessary to avoid injustice?

    Promissory estoppel. Jurisdictions differ on how readily they apply estoppel to overcome the statute.

11. Under UCC 2-201(3), when does the exception for specially manufactured goods apply?

    When the goods are unsuitable for sale to others and the seller has substantially begun making or procuring them. The seller must have begun before receiving notice of repudiation.

12. A contractor orally agrees to build a house to be completed in 18 months. Why is the agreement within the statute of frauds?

    By its terms it cannot be performed within one year. The agreed completion date places performance beyond one year from the making of the contract.

13. Under UCC 2-201(2), what is the effect of a written confirmation sent between merchants?

    It satisfies the statute against the recipient unless the recipient objects in writing within 10 days. The confirmation must be sufficient against the sender and received by a merchant with reason to know its contents.

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