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Chapter 9

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Valerie Irie

BU231 Chapter 9 – The Requirement of Writing The Distinction between Substance and Form The Benefits of a Written Record -The following categories of form are important: -Contracts whose terms are entirely oral -Contracts whose terms are part oral and part written -Contracts whose terms are entirely in writing, whether all in one document or spread through several documents, such as a series of letters -In good business practice, some record is kept of even the simplest transaction at the time it is made -When a contract is wholly oral, the first problem for the court is to determine what exactly the parties agreed to Legislation Dealing with Writing -Not all contracts require writing; very often oral contracts are legally enforceable -At common law, once the terms are ascertained, a contract is equally effective whether it is in writing or merely oral -The subject matter of the contract will dictate the exact writing requirements, if any The Statute of Frauds -The oldest piece of legislation dealing with writing -The effect of the Statute of Frauds is to make certain types of contracts unenforceable unless they are in writing -The courts have tried to limit the application of the Statute wherever possible The Types of Contract Affected by the Statute of Frauds 1. A Promise to Answer for the Debt, Default, or Miscarriage of Another: Guarantee and Indemnity -Guarantee – a conditional promise to pay only if the debtor defaults -Indemnity – a promise by a third party to be primarily liable to pay the debt -The courts have applied this part of the Statute of Frauds only to guarantees -A guarantee must be made in writing to be enforceable, but a promise to indemnify is outside the Statute and is enforceable without being in writing -Miscarriage – an injury caused by the tort of another person 2. An Agreement Made in Consideration of Marriage -This section has always been interpreted as applying not to a promise to marry but to such related matters as arrangements about assets brought into a marriage as common property -The section has been replaced in all provinces by extensive family law reform legislation that recognizes a wide variety of enforceable arrangements in marriage and in cohabitation relations 3. A Contract Concerning an Interest in Land -It is essential to have verified written records of transactions affecting interests in land, and these records must be available over many years for inspection by interested persons -Part performance – performance begun by a plaintiff in reliance on an oral contract relating to an interest in land, and accepted by the courts as evidence of the contract in place of a written memorandum BU231 Chapter 9 – The Requirement of Writing -Once an act of part performance is accepted by the court as sufficient evidence, the contract will be enforced 4. An Agreement Not to be Performed by Either Party within One Year If a contract is, by its terms, to extend beyond one year, it is governed by the Statute, even though those terms state that it may be brought to an end in less than one year -The courts have also held that the Statute does not apply in cases where one party will necessarily require more than a year to perform, provided that the contract also shows an intention that the other party will wholly perform within a year 5. Ratification of Infants’ Contracts -Contracts requiring ratification by infants coming of age must, in some jurisdictions, be ratified in writing to be enforceable Requirements for a Written Memorandum -The Statute requires a “note or memorandum” of the contract “signed by the party to be charged” or by the party’s authorized agent All Essential Terms Must be Included -The memorandum must contain all the essential terms of the contract, including the identity of the parties -The memorandum need not be wholly within a single document; several written notes may be taken together to satisfy the requirements of the Statute Signed by the Defendant -The Statute requires that the note or memorandum be signed by the party to be charged – that is, sued (the defendant) – and only that person, not the plaintiff -The plaintiff’s own signature is irrele
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