Law of Contracts - 2

Statute of Frauds

• Must all contracts be in writing?

WHY HAVE A STATUTE OF FRAUDS?

• Requirements of the writing– Statute of Frauds requirements– UCC requirements– Special rules for signatures

TYPES OF CONTRACTS WITHIN THE STATUTE OF FRAUDS

• Contract for the sale of goods for $500 or more

SPECIAL RULES FOR MERCHANTS

• Merchant status in sales contracts• Exceptions to the Statute of Frauds for sales

contracts– Goods received and accepted by the buyer– Buyer pays for goods and seller accepts payment– Goods specially made not suitable for sale to others– Party against whom enforcement sought admits oral

contract made

TYPES OF CONTRACTS WITHIN THE STATUTE OF FRAUDS

• Contract for the sale of goods for $500 or more

• Contract to sell an interest in real property

• Contracts that require more than one year to complete

TYPES OF CONTRACTS WITHIN THE STATUTE OF FRAUDS

• Contract to pay a debt or answer for another’s debt– Exception—main purpose rule

• Contract for which the consideration is marriage

(continued)

HOW ARE CONTRACTS INTERPRETED?

• Integration clause• Specific rules of interpretation

– Analysis– Conflicting terms– Words– Authors of ambiguity– Implied reasonableness

• Parol evidence rule– Exception to the parol evidence rule

Discussion

• Identify a contract you have recently entered into.

• What rights have been acquired by the parties?

Transfer and Discharge of Obligations

GOALS

• Rights can be “assigned.”

• Duties can be “delegated.”

• Describe the various ways in which contractual obligations may be discharged:

DISCHARGE OF CONTRACTUAL OBLIGATIONS

• By performance– Timing of performance

• By the initial terms

• By subsequent agreement– Rescission– Accord and satisfaction– Novation

DISCHARGE OF CONTRACTUAL OBLIGATIONS

• By impossibility of performance

• By operation of law

• By tender of performance

(continued)

REMEDIES POSSIBLE FOR BREACH

• Remedy for a minor breach

• Remedies for a major breach– Rescission and restitution– Money damages– Specific performance

FACTORS AFFECTING CHOICE OF REMEDY

• Conflict of remedies

• Duty to mitigate

• Waivers

• Statute of limitations

• Bankruptcy

Chapter 11 Slide 15

REMEDIES FOR BREACH OF CONTRACT

Chapter 10 Slide 16

WHICH AGREEMENTS ARE ILLEGAL?

• Illegal lotteries• Agreements to pay usurious interest• Agreements involving illegal discrimination• Agreements that obstruct legal procedures• Agreements made without a required

competency license• Agreements that affect marriage negatively

Chapter 10 Slide 17

WHICH AGREEMENTS ARE ILLEGAL?

• Agreements that restrain trade unreasonably– Price fixing– Resale price maintenance– Allocation of markets– Agreements not to compete

(continued)

Chapter 10 Slide 18

WHEN WILL THE COURTS ENFORCE ILLEGAL AGREEMENTS?

• Protected victims

• The excusably ignorant

• Rescission prior to illegal act

• Divisible contracts

MARRIAGE AND CONTRACTS

• Contractual elements of premarital relationships– Statutory requirements

• Contractual elements of marital relationships– Marital consortium– Rights and duties of parenthood– Property rights and duties

• Common-law marriage (not in California)

Chapter 11 Slide 20

ENDING THE MARRIAGE CONTRACT

• By annulment• By divorce

– Separation– No-fault divorce

• Typical issues in a divorce– Division of property– Child custody and support– Alimony