9.3 Exceptions to the Statute of Frauds
3 min read•july 22, 2024
The Statute of Frauds requires certain contracts to be in writing, but there are exceptions. These include , , , and . Each exception has specific criteria and can make an oral contract enforceable.
Understanding these exceptions is crucial for navigating contract law. They provide ways to enforce that would otherwise be unenforceable under the Statute of Frauds. Knowing when and how these exceptions apply can make or break a case in contract disputes.
Exceptions to the Statute of Frauds
Exceptions to Statute of Frauds
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- Part performance exception applies when a party has partially performed their obligations under an oral contract such as buyer taking possession of land, making improvements, or paying a portion of purchase price
- Promissory estoppel exception applies when a party has reasonably relied on an oral promise to their detriment requires a clear and definite promise, reasonable reliance, and injustice if promise is not enforced
- Admission under oath exception applies when a party admits under oath in court or during a deposition to existence and terms of an oral contract
- Merchant's confirmation exception applies to contracts between merchants for sale of goods worth $500 or more a written confirmation sent by one merchant to another can satisfy Statute of Frauds if not objected to within 10 days
Application of Statute exceptions
- Part performance exception requires party seeking to enforce contract to have partially performed their obligations and partial performance must be unequivocally referable to alleged oral contract
- Promissory estoppel exception requires promisor to have made a clear and definite promise, promisee to have reasonably relied on promise, reliance to have resulted in detriment to promisee, and injustice can only be avoided by enforcing promise
- Admission under oath exception requires party against whom enforcement is sought to admit to existence and terms of oral contract under oath admission must be voluntary and unequivocal
- Merchant's confirmation exception requires both parties to be merchants, contract to be for sale of goods worth $500 or more, written confirmation to be sufficient to indicate existence of a contract, and recipient must not object to confirmation within 10 days of receipt
Consequences of exception reliance
- If an exception applies, oral contract may be enforced despite non-compliance with Statute of Frauds
- Part performance exception may result in court ordering specific performance of contract or awarding damages to performing party
- Promissory estoppel exception may result in court enforcing promise to extent necessary to prevent injustice, which may include awarding reliance damages
- Admission under oath exception may result in court enforcing contract based on party's admission of its existence and terms
- Merchant's confirmation exception may result in written confirmation serving as substitute for signed writing required by Statute of Frauds, making contract enforceable
Comparison of Statute exceptions
- Part performance and promissory estoppel exceptions both involve reliance on an oral promise, but part performance specifically relates to contracts for sale of land or real estate part performance requires partial performance of contractual obligations, while promissory estoppel focuses on detrimental reliance on a promise
- Admission under oath and merchant's confirmation exceptions both provide alternative means of satisfying writing requirement admission under oath applies to any type of contract, while merchant's confirmation is limited to contracts between merchants for sale of goods worth $500 or more
- Part performance exception is based on actions taken in reliance on an oral contract, while admission under oath relies on a party's verbal acknowledgment of the contract
- Promissory estoppel exception is based on reliance on a promise, while merchant's confirmation is based on a written confirmation of an agreement between merchants
Key Terms to Review (15)
Admission Under Oath: An admission under oath is a formal acknowledgment of the truth of a statement made while under the penalty of perjury, typically during legal proceedings. This concept plays a crucial role in enforcing the Statute of Frauds, as it allows certain claims to be validated even if they are not in writing. In essence, if a party admits to a contract's existence during sworn testimony, that admission can serve as an exception to the general rule requiring written contracts for enforceability.
Clear and Convincing Evidence: Clear and convincing evidence is a standard of proof used in various legal contexts, requiring a party to demonstrate that their claims are highly likely to be true. This standard is higher than a mere preponderance of the evidence but lower than beyond a reasonable doubt. It often comes into play in situations where the law requires more than just the basic threshold of proof, emphasizing the need for a substantial degree of certainty in the claims presented.
Equitable Estoppel: Equitable estoppel is a legal doctrine that prevents a party from asserting a claim or right that contradicts their prior conduct, especially when another party has relied on that conduct to their detriment. This concept promotes fairness by ensuring that individuals cannot unfairly take advantage of others due to inconsistent statements or actions. In the context of certain legal doctrines, it serves as a crucial tool in enforcing promises and obligations, ensuring that the reliance on representations made by one party is recognized and upheld.
Informal Contracts: Informal contracts are agreements that do not require a specific form or written document to be legally enforceable, meaning they can be made orally or implied through actions. They are often based on mutual understanding and intent between the parties involved. While informal contracts may lack the formalities of written contracts, they can still create binding obligations under certain conditions, especially when exceptions to the Statute of Frauds apply.
Integrated Agreements: Integrated agreements refer to contracts that are intended to be the complete and final expression of the parties' agreement. These agreements serve as a comprehensive source of terms, excluding any prior agreements or negotiations that may have occurred. The concept is crucial in understanding how courts interpret the intent of the parties, particularly when evaluating claims related to oral or written modifications and the enforceability of promises.
L'Estrange v. F Graucob: L'Estrange v. F Graucob is a pivotal case in contract law that established the principle that a party is bound by the terms of a contract they have signed, even if they have not read or understood those terms. This case emphasizes the importance of signatures in contractual agreements and reinforces the notion that individuals are expected to take responsibility for the documents they sign, regardless of their awareness of the specific contents.
Marsh v. Alabama: Marsh v. Alabama is a landmark U.S. Supreme Court case from 1946 that addressed the intersection of property rights and free speech. The Court ruled that a private company town could not prohibit individuals from exercising their First Amendment rights, recognizing that a private entity performing municipal functions could not restrict public access to common areas.
Merchant's Confirmation: A merchant's confirmation is a written confirmation of an agreement between parties that serves as evidence of a contract, typically sent from one merchant to another. This document can act as a binding contract even if the recipient did not formally accept the offer, especially in commercial transactions governed by the Uniform Commercial Code (UCC). It helps clarify terms and conditions, thus protecting the interests of the parties involved in business dealings.
Oral Agreements: Oral agreements are contracts that are spoken and not written down. They can be just as binding as written contracts, but they can be harder to enforce because proving their existence and specific terms can be challenging. These agreements often rely on the memory of the parties involved and can lead to disputes if there are disagreements about what was said.
Part Performance: Part performance is a legal doctrine that allows for the enforcement of a contract even if it does not meet the Statute of Frauds requirements, as long as one party has partially fulfilled their obligations under the contract. This doctrine serves to prevent unjust outcomes when one party has relied on the agreement and taken significant steps toward its execution, thereby establishing grounds for enforcement despite the lack of a written contract.
Promissory Estoppel: Promissory estoppel is a legal principle that prevents a party from withdrawing a promise made to another party when the latter has reasonably relied on that promise to their detriment. This doctrine is essential in contract law as it allows for enforceability of certain promises even when a formal contract does not exist, often bridging gaps where consideration or formalities may be lacking.
Real estate contracts: Real estate contracts are legally binding agreements that outline the terms and conditions related to the buying, selling, or leasing of real property. These contracts must typically be in writing to be enforceable, serving as a clear record of the parties' intentions and obligations. Understanding how these contracts interact with legal requirements helps clarify the significance of statutory frameworks like the Statute of Frauds, which governs what types of agreements must be in writing to be valid.
Substantial performance: Substantial performance refers to a situation in contract law where a party fulfills enough of their contractual obligations to warrant payment, even if they haven't completely met every detail of the contract. This concept is critical in determining whether a party has breached a contract and can impact various legal principles, such as damages and enforceability.
Sufficient Writing: Sufficient writing refers to a written document that meets the legal requirements for enforceability under the Statute of Frauds. This typically means that the writing must contain essential terms of the contract and be signed by the party to be charged, providing evidence of the agreement. The sufficiency of the writing is crucial as it helps establish the intent of the parties and reduces ambiguity in contractual agreements.
Unjust Enrichment: Unjust enrichment is a legal principle that holds a party liable to another for a benefit received, when retaining that benefit would be unjust. This concept often arises when there’s no enforceable contract between the parties, and it ensures that one party does not profit at the expense of another without compensating them appropriately.