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CHAPTER 15
THE STATUTE OF FRAUDS—
WRITING REQUIREMENT
AND ELECTRONIC RECORDS
ANSWERS TO QUESTIONS
AT THE ENDS OF THE CASES
CASE 15.1—QUESTIONS (PAGE 291)
1A. Why was Salim arguing that the contract should be deemed enforceable when he was being sued
for breach of contract? If the contract was deemed enforceable, Salim could argue that Soliaman and
Chowdhury had breached the contract by backing out of the agreement. In that situation, Salim could
ask for money damages in the amount of the agreed-on purchase price. (Note: Although Soliaman and
Chowdhury initially sued Salim for breach of contract, later in the trial they argued that the contract was
unenforceable, apparently believing that their chances of recovery were better if the contract was
deemed unenforceable and thus void.)
2A. What might Salim have done to ensure that the sales contract would be enforceable? After
CASE 15.2—QUESTIONS (PAGE 295)
THE ETHICAL DIMENSION
On what additional theories could ARI’s request for relief be based in this case? What common thread
underlies these theories? ARI advanced several legal and equitable theories on its behalf, including
promissory estoppel. In denying SLT’s motion for summary judgment on this claim, the court said, “[I]t
appears that SLT used ARI to obtain the contract with NYCDOE, that SLT could not have fulfilled one of
130 UNIT THREE: CONTRACTS AND E-CONTRACTS
the mandatory requirements of the [kiosks] without ARI’s assistance, that SLT stole ARI’s confidential
information in an effort to design and build its own kiosks so that it could cut SLT out of the NYCDOE
deal, that SLT intended to do so all along, that SLT did not negotiate in good faith to reach a written
contract with ARI, and that SLT reneged on its promise to use ARI as the exclusive supplier for the
NYCDOE project for no apparent reason.”
ARI also asserted unjust enrichment. The court said, “Quasi-contractual remedies such as unjust
enrichment are not available when an enforceable express contract regulates the parties’ relations with
ARI also argued fraud and other theories. The common thread underlying these grounds is that
“not enforcing SLT’s promise to use ARI as the exclusive supplier on the NYCDOE project would
essentially sanction the perpetration of fraud or result in injustice.” The Statute of Frauds, for example,
“was enacted to prevent fraud and injustice, not to foster or encourage it, and the court should not
permit it to be used as a shield to protect fraud or to enable one to take advantage of his or her own
wrong.”
THE LEGAL ENVIRONMENT DIMENSION
Could ARI successfully assert a claim against SLT based on fraudulent misrepresentation? Explain. A
CASE 15.3—QUESTION (PAGE 299)
THE ETHICAL DIMENSION
The parol evidence rule is an age-old and important rule of contract law. Why should the courts allow
exceptions to this rule? Freedom of contract is one of the most important principles of contract law.
CHAPTER 15: THE STATUTE OF FRAUDS 131
one party, through deception or fraud, entices another to enter into a contract, if parol evidence could
not be admitted to demonstrate that fraud or deception had occurred, it bring about an injustice.
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Statute of Frauds
An employer’s promise of lifetime employment in exchange for an employee’s forgoing a job
opportunity falls within the Statute of Frauds and needs to be in writing, because the deal is not capable
of being performed within one year. One might argue that Odin could possibly die within one year, but
courts have not favored this argument, reasoning that a lifetime contract inherently anticipates a
relationship of long duration—certainly longer than one year.
2A. Exception
Unless Montieth admits that the parties had a lifetime contract, Odin’s best chance would be to assert
3A. Writing
A memorandum evidencing an oral contract needs some form of signature to satisfy the Statute of
Frauds. The signature need not be placed at the end of the document but can be anywhere in the
writing; it can even be initials rather than the full name. “10 percent for life” clearly would not meet this
requirement. Even if it did, the Statute of Frauds also requires that the memorandum contain at least
the essential terms of the contract, including the names of the parties, the subject matter,
consideration, and quantity. Again, “10 percent for life” would be insufficient.
4A. Parol evidence
The rule of parol evidence specifies that only evidence of consistent additional terms can be admitted to
supplement a partially integrated contract. No evidence that contradicts the original contract is allowed.
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE AT THE END OF THE
CHAPTER
132 UNIT THREE: CONTRACTS AND E-CONTRACTS
Many countries have eliminated the Statute of Frauds except for the sale of real estate. The
United States should do the same. Certainly, unfair situations arise concerning the enforceability of
ANSWERS TO QUESTIONS AND CASE PROBLEMS
AT THE END OF THE CHAPTER
15-1A. The one-year rule
(Chapter 15—Page 291)
Under the Statute of Frauds, any contract that cannot be performed within one year from the date of
entering into the contract (time of acceptance), without breaching the terms, needs a writing to be
enforceable. Under this rule, the following decisions are made:
(a) The one-year period is measured from the day after the contract is made. Because Benson
has the right to begin the one-year contract immediately, it is possible to perform the contract
within one year. Therefore, the contract falls outside the Statute of Frauds and can be legally
enforced without a writing.
(b) The one-year period here begins with the formation of the contract, so it is measured from
the day after the contract is made, May 6. Because performance is for nine months and cannot
15-2A. QUESTION WITH SAMPLE ANSWER: Collateral promises
In this situation, Mallory becomes what is known as a guarantor on the loan. That is, she guarantees the
hardware store that she will pay for the mower if her brother fails to do so. This kind of collateral
15-3A. The one-year rule
(Chapter 15—Page 291)
15-4A. Collateral promises
(Chapter 15—Pages 291–293)
15-5A. Oral contracts
(Chapter 15—Page 295)
The court should conclude that the parties had a contract and order its enforcement. Meade would not
15-6A. Interest in land
(Chapter 15—Pages 290–291)
The court found a breach of contract and awarded $7,185 in damages to Shelby’s. Sierra appealed to a
15-7A. CASE PROBLEM WITH SAMPLE ANSWER: The parol evidence rule
134 UNIT THREE: CONTRACTS AND E-CONTRACTS
Under the parol evidence rule, a court could refuse to consider Canopy’s evidence of an oral agreement
between Canopy and Novell with respect to the payment of Canopy’s expenses in its suit with Microsoft.
15-8A. Contract for a sale of goods
(Chapter 15—Page 295)
The court issued a summary judgment in Blankenship’s favor. On Henry’s appeal, a state intermediate
appellate court reversed this judgment and remanded the case for trial. The appellate court ruled first
15–9A. The parol evidence rule
(Chapter 15—Page 297)
The trial court accepted parol evidence because it believed that there was a conflict between the 10-
15-10A. A QUESTION OF ETHICS: The parol evidence rule
CHAPTER 15: THE STATUTE OF FRAUDS 135
(a) The court refused to accept the tape recording as evidence and entered a judgment in
Williams’s favor on Parker’s breach–of-contract claim. Both parties appealed to the Alabama Supreme
Court, which affirmed the lower court’s judgment. The state supreme court quoted from the Alabama
Statute of Frauds: “[E]very agreement is void unless such agreement or some note or memorandum
thereof expressing the consideration is in writing and subscribed by the party to be charged,” including
(b) As noted in the question, the lower court ruled in Parker’s favor on Williams’s
counterclaim. The Alabama Supreme Court cited Williams’s “burden of ensuring that the record on
appeal contains sufficient evidence to warrant a reversal of the judgment he challenges. . . . [W]hen the
record is silent as to evidence considered by the trial court, we must presume that the evidence
considered was sufficient to support the trial court’s judgment. Because we do not have a complete
record to consider, we cannot assume error on the part of the trial court; thus we must affirm its
judgment for Parker on Williams’s counterclaim.”
(c) Perhaps none of the parties involved in the circumstances of the Parker case is a likely
candidate for ethical behavior. What appears to have motivated most, if not all, of the participants—
Parker, Shelborne, Williams, and Tundy—is common greed. Regardless of one’s source for ethical
standards—religion, philosophy, or some other set of principles—the motivation in their practice may be
self-interest, but their application recognizes the Golden Rule, or balances costs and benefits, or
otherwise recognizes the integrity of others and their rights. The greed evidenced in this case does not
go beyond self-interest as motivation, however, and rationalizes a payment of funds of which some
other party has been illegitimately deprived. “Something for nothing” is not an ethical precept, yet it
seems to have been the only principle to which most of the players in the Parker case adhered.
Shelborne and Tundy had disappeared, but Williams was an attorney who continued to assure
Parker that his note would be paid. Were there no sanctions to be imposed on him for his role in the
circumstances of this case? Frustrated, Parker filed a complaint with the state against Williams, alleging