Chapter 9 Notes
Recall: Contract is formed (legally) when there is offer, consideration, and intention.
Substance of a contract are the terms of the contract
Form: is the physical form it takes
Not all contracts have to be in writing; oral contracts are legally enforceable as well
The subject matter of the contract dictates the exact writing requirements (ex. mortgage
Three common types of legislation affecting wider ranges of contracts
1. The Statute of Frauds (1677)- the first piece of legislation to impose writing of
• Make certain types of contracts unenforceable unless they are in writing
2. The Sale of Goods Act- focuses on the most common type of transaction- a purchase
3. Consumer Protection Legislation- deals with most vulnerable type of party
When Statue of Fraud applies to something: the promise should be in writing.
The Types of Contract Affected by the Statute of Fraud:
1. A promise to answer for the debt, default, or miscarriage of another: guarantee and
• Guarantee: a conditional promise to pay only if the debtor defaults; statute applies;
has to be in writing to be effective
• Does not apply to Indemnity: a promise of the third party to be primarily liable to pay
the debt; does not have to be in writing
• Miscarriage does not have to be in writing to be enforceable either
2. An agreement made in consideration of marriage: applies; in regards to all assets
brought into marriage
3. A contract concerning an interest in land: applies to leasing land, house, or a building;
repairs are not included in this
• Part performance is often taken in place of a written memorandum: but this only
works when the following are met:
a) The contract must be one concerning land b) Existence of a contract must be clearly suggested respecting the land in
question; not be ambiguous. A deposit on the price of land is not sufficient; a part
performance is sufficient.
c) Suffering of loss because of the act of performance
4. An agreement not to be performed by either party within one year:
• If a contract extends beyond a year by its terms, statue applies
• If a contract does not imply that, but has been over a year, it does not apply
• This is to exclude the Statute contracts for an indefinite period
5. Ratification of Infants’ Contracts: contracts requiring ratification by infants upon
coming of age (contracts that are not for a permanent interest in property) must be in
writing to be enforceable
Requirements for a Written Memorandum:
• All essential terms must be included: including identity of the parties; adequate
description of subject matter; all cross-references within documents
• Signed by the defendant; a contract obviously cannot be enforceable if the
defendant did not sign it
Consequences for Contracts within its scope: unenforceable contract still exists; it is not void.
These are the ways in which the contract may affect the legal relations b/w parties.
1. Recovery of money paid under a contract: if both parties in (unenforceable) contract
decide not to perform, recovery of any down payment made will depend upon which
party repudiates the contract; usually the person who did not breach the contract would
2. Recovery for Goods and Service: party who accepted a good under the contract
cannot keep the benefit unless something is given up for it.
3. Effect of a subsequent written memorandum: as long as memorandum comes into
existence before the act is done, an additional written memorandum may come into
existence and be enforceable.
4. Defendant must expressly plead the statute: if he fails to mention it, the court will
decide the case without reference to the statute; the plaintiff will succeed
5. Effect on Prior Written Contract: an oral contract within the statute is effective as long
as a party does not have to bring an action to have it enforced; however, oral contract
cannot be sued upon directly (see illustration 9.6 on p.212)
Requirements of the Sale of Goods Act:
Special types of evidence to enforce contracts for the sale of goods. • What constitutes a Sale of Goods under the Act? - You must be able to identify what
it means to “make a sale of good” in a particular contract; ex. does it mean to provide
the supply as well, or just the construction?
a) The aggregate price of the order is the deciding amount for the purposes of the
• Evidence that satisfies the Act
a) “Acceptance” and actual receipt of the goods by the buyer: “any conduct by the