Quiz 15: The Statute of Fraudswriting Requirement and Electronic Records

Business

Why was Salim arguing that the contract should be deemed enforceable when he was being sued for breach of contract

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Essay

The Requirement of Writing: In the case of Salim v. Solaiman 302 Ga.App. 607, 691 S.E.2d 389 (2010) the trial court issued judgment in favor of Solaiman after finding the parties' purchase agreement to be unenforceable because the real property to be purchased was not sufficiently described. The contract for purchase was voided. The appellate court affirmed the judgment. Salim argued that the contract should be deemed enforceable because he wanted to bind the purchasers to the sale. Also, he did not want to return the deposit and monies paid to renew the alcohol sales license, which was not stipulated in the agreement for purchase. Salim was not in violation of the contract, and so a claim for breach of contract would not have been successful.

Q 2

The One-Year Rule On May 1, by telephone, Yu offers to hire Benson to perform personal services. On May 5, Benson returns Yu's call and accepts the offer. Discuss fully whether this contract falls under the Statute of Frauds in the following circumstances: (a) The contract calls for Benson to be employed for one year, with the right to begin performance immediately. (b) The contract calls for Benson to be employed for nine months, with performance of services to begin on September 1. (c) The contract calls for Benson to submit a written research report, with a deadline of two years for submission.

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a). The One-Year Rule - One Year Term: In order for an oral contract to be enforceable, it must be possible to complete the contract within one year after the date of the contract. So long as Benson exercises the right to begin performance immediately, the contract will be possible to complete within the one-year requirement. Hence, the oral contract was possible to fulfill within the one-year rule and therefore enforceable under the Statute of Frauds. b). The One-Year Rule - Nine Month Term: In order for an oral contract to be enforceable, it must be possible to complete the contract within one year after the date of the contract. Benson may not begin employment until September 1, and nine months later the contract would expire on May 31. That time frame falls outside of the requirement to perform the contract within one year from the day after the contract is entered into. The contract is entered into on May 5, and the contract will be impossible to complete within the one-year requirement. Hence, the oral contract was not possible to fulfill within the one-year rule and therefore unenforceable under the Statute of Frauds. c). The One-Year Rule - Two Year Term: In order for an oral contract to be enforceable, it must be possible to complete the contract within one year after the date of the contract. So long as it is possible for Benson to complete and submit the research covered under the oral contract within the one-year time limit, the contract will be enforceable. The Two-year deadline served as a guideline and not a contract term. Hence, the oral contract was possible to fulfill within the one-year rule and therefore enforceable under the Statute of Frauds.

Q 3

What might Salim have done to ensure that the sales contract would be enforceable

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Essay

The Requirement of Writing: In the case of Salim v. Solaiman 302 Ga.App. 607, 691 S.E.2d 389 (2010) the trial court issued judgment in favor of Solaiman after finding the parties' purchase agreement to be unenforceable because the real property to be purchased was not sufficiently described. The contract for purchase was voided. The appellate court affirmed the judgment. In order for the sales contract to be enforceable, Salim would have had to include an adequate property description to include a detailed tract description or a key by which it may have been located with the aid of extrinsic evidence. The street address was insufficient for describing the property intended for conveyance.

Q 4

QUESTION WITH SAMPLE ANSWER: Collateral Promises. Mallory promises a local hardware store that she will pay for a lawn mower that her brother is purchasing on credit if the brother fails to pay the debt. Must this promise be in writing to be enforceable Why or why not

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Q 5

The One-Year Rule On January 1, Damon, for consideration, orally promised to pay Gary $300 a month for as long as Gary lived, with the payments to be made on the first day of every month. Damon made the payments regularly for nine months and then made no further payments. Gary claimed that Damon had breached the oral contract and sued Damon for damages. Damon contended that the contract was unenforceable because, under the Statute of Frauds, contracts that cannot be performed within one year must be in writing. Discuss whether Damon will succeed in this defense.

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Q 6

Collateral Promises Jeremy took his mother on a special holiday to Mountain Air Resort. Jeremy was a frequent patron of the resort and was well known by its manager. The resort required each of its patrons to make a large deposit to ensure payment of the room rental. Jeremy asked the manager to waive the requirement for his mother and told the manager that if his mother for any reason failed to pay the resort for her stay there, he would cover the bill. Relying on Jeremy's promise, the manager waived the deposit requirement for Jeremy's mother. After she returned home from her holiday, Jeremy's mother refused to pay the resort bill. The resort manager tried to collect the sum from Jeremy, but Jeremy also refused to pay, stating that his promise was not enforceable under the Statute of Frauds. Is Jeremy correct Explain.

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Q 7

Oral Contracts Jason Knapp, doing business as Knapp Associates, hired Barbara Meade as an independent contractor in March 2009. The parties orally agreed on the terms of employment, including payment to Meade of a share of the company's income, but they did not put anything in writing. In March 2011, Meade quit. Knapp then told Meade that she was entitled to $9,602.17-25 percent of the difference between the accounts receivable and the accounts payable as of Meade's last day. Meade disagreed and demanded more than $63,500-25 percent of the revenue from all invoices, less the cost of materials and outside processing, for each of the years that she worked for Knapp. Knapp refused. Meade filed a lawsuit in a state court against Knapp, alleging breach of contract. In Knapp's response and at the trial, he testified that the parties had an oral contract under which Meade was entitled to 25 percent of the difference between accounts receivable and payable as of the date of Meade's termination. Did the parties have an enforceable contract How should the court rule, and why

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Q 8

Interests in Land Sierra Bravo, Inc., and Shelby's, Inc., entered into a written "Waste Disposal Agreement" under which Shelby's allowed Sierra to deposit on Shelby's land waste products, harmful materials, and debris removed by Sierra in the construction of a highway. Later, Shelby's asked Sierra why it had not constructed a waterway and a building pad suitable for a commercial building on the property, as they had orally agreed. Sierra denied any such agreement. Shelby's filed a suit in a Missouri state court against Sierra, alleging breach of contract. Sierra contended that any oral agreement was unenforceable under the Statute of Frauds. Sierra argued that because the right to remove minerals from land is considered a contract for the sale of an interest in land to which the Statute of Frauds applies, the Statute of Frauds should apply to the right to deposit soil on another person's property. How should the court rule, and why [ Shelby's, Inc. v. Sierra Bravo, Inc., 68 S.W.3d 604 (Mo.App.S.D. 2002)]

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Q 9

CASE PROBLEM WITH SAMPLE ANSWER: The Parol Evidence Rule. Novell, Inc., owned the source code for DR DOS, a computer operating system that Microsoft Corp. targeted with allegedly anticompetitive practices in the early 1990s. Novell worried that if it filed a suit, Microsoft would retaliate with further alleged unfair practices. Consequently, Novell sold DR DOS to Canopy Group, Inc., a Utah corporation. The purposes of the sale were to obligate Canopy to bring an action against Microsoft and to allow Novell to share in the recovery without revealing its role. Novell and Canopy signed two documents-a contract of sale, obligating Canopy to pay $400,000 for rights to the source code, and a temporary license, obligating Canopy to pay at least $600,000 in royalties, which included a percentage of any recovery from the suit. Canopy settled the dispute with Microsoft, deducted its expenses, and paid Novell the remainder of what was due. Novell filed a suit in a Utah state court against Canopy, alleging breach of contract for Canopy's deduction of expenses. Canopy responded that it could show that the parties had an oral agreement on this point. On what basis might the court refuse to consider this evidence Is that the appropriate course in this case Explain. [ Novell, Inc. v. Canopy Group, Inc., 2004 UT App. 162, 92 P.3d 768 (2004)]

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Q 10

Contract for a Sale of Goods Milton Blankenship agreed in writing to buy 15 acres of Ella Mae Henry's junkyard property for $15,000 per acre with a ten-year option to buy the remaining 28.32 acres. Blankenship orally agreed to (1) begin operating a car skeleton-processing plant within six to fifteen months; (2) buy as many car skeletons generated by the yard as Henry wanted to sell him, at a certain premium over the market price; and (3) allow all junk vehicles on the property to remain until they were processed at the new plant. Blankenship never operated such a plant, never bought any vehicles from the yard, and demanded that all vehicles be removed from the property. To obtain the remaining 28.32 acres, Blankenship filed a suit in a Georgia state court against Henry, who responded with a counterclaim for breach of contract. Under oath during discovery, Henry testified that their oral agreement allowed him to sell "as many of the car skeletons generated by the Henry junkyard" as he wished, and Blankenship testified that he had agreed to buy as many skeletons as Henry was willing to sell. Does the Statute of Frauds undercut or support Henry's counterclaim Explain. [ Henry v. Blankenship, 284 Ga.App. 578, 644 S.E.2d 419 (2007)]

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Q 11

The Parol Evidence Rule When Hurricane Katrina hit the Gulf Coast in 2005, Evangel Temple Assembly of God in Wichita Falls, Texas, contacted Wood Care Centers, Inc., about leasing a facility it owned to house evacuees from the hurricane. Evangel and Wood Care reached an agreement and signed a twenty-year lease at $10,997 per month. One clause said that Evangel could terminate the lease at any time by giving Wood Care notice and paying 10 percent of the balance remaining on the lease. Another clause stated that if the facility was not given a property tax exemption, Evangel had the option to terminate the lease. Nine months later, the last of the evacuees left the facility, and Evangel notified Wood Care that it would end the lease. Wood Care demanded the 10 percent payment. Evangel claimed that it did not need to make the payment because if the facility converted back to a "non-church" use, it would lose its tax-exempt status and Evangel could simply terminate the lease. Evangel's pastor testified that the parties understood that this would be the scenario at the time the lease was signed. The trial court held that Evangel owed nothing. Wood Care appealed, contending that the trial court improperly allowed parol evidence to interpret the contract. Was the trial court's acceptance of parol evidence correct Why or why not [ Wood Care Centers, Inc. v. Evangel Temple Assembly of God of Wichita Falls, 307 S.W.3d 816303 (Tex.App.-Fort Worth 2010)]

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Q 12

A QUESTION OF ETHICS: The Parol Evidence Rule. William Williams is an attorney in Birmingham, Alabama. In 1997, Robert Shelborne asked Williams to represent him in a deal in London, England, from which Shelborne expected to receive $31 million. Shelborne agreed to pay Williams a fee of $1 million. Their overseas contact was Robert Tundy, who said that he was with the "Presidency" in London. Tundy said that a tax of $100,010 would have to be paid for Shelborne to receive the $31 million. Shelborne asked James Parker, a former co-worker, to lend him $50,000. Shelborne signed a note agreeing to pay Parker $100,000 within seventy-two hours. Parker, Shelborne, and Williams wired the $50,000 to an account at Chase Manhattan Bank. They never heard from Tundy again. No $31 million was transferred to Shelborne, who soon disappeared. Williams then learned that io "Presidency" existed in London. Whenever Parker asked Williams about the note, Williams assured him that he would be paid. On Parker's behalf, Williams filed a suit in an Alabama state court against Shelborne, seeking the amount due on the note and damages. The court entered a judgment against the defendant for $200,000, but there were no assets from which to collect it. [ Parker v. Williams, 977 So.2d 476 (Ala. 2007)] (a) Parker filed a suit in an Alabama state court against Williams, alleging, among other things, breach of contract. Parker offered as evidence a tape recording of a phone conversation in which Williams guaranteed Shelborne's loan. Is the court likely to rule in Parker's favor on the contract claim Why or why not (b) In response to Parker's suit, Williams filed a counterclaim, seeking unpaid attorneys' fees relating to the suit that Williams filed against Shelborne on Parker's behalf. The court ruled against Williams on this claim. He appealed to the Alabama Supreme Court but failed to supply a transcript of the trial on his counterclaim, as it was his duty to do. Is the appellate court likely to rule in his favor Why or why not (c) The sham deal at the center of this case is known to law enforcement authorities as advance fee fraud, commonly referred to as a "419 scam." The victim is promised a transfer of funds from an overpaid contract, or some other suspect source, but is asked to pay a tax or other fee first. Among the parties attracted by the 419 scam in this case, who, if anyone, behaved ethically Discuss.

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