Exam 14: Written Contracts

Sweet Plantation,Inc.made a written contract with Candy,Inc.whereby Sweet Plantation agreed to supply all of Candy's sugar requirements for the next year at $.25 per pound.A dispute arose as to how much sugar Sweet is to supply.The parole evidence rule will bar Sweet's introduction of evidence concerning the intent of the requirements of Candy.

Vicki entered into a written contract to buy a car from Valley Motors.The written contract included a provision that stated,"This writing is the full and final expression of the parties' agreement; anything said before signing or while signing is irrelevant." This is:

Either party may demand rescission of a fully executed oral contract that was required to have been in writing under the statute of frauds.

The Uniform Electronic Transmission Act (UETA):

In the Seton Co.v.Lear Corp.,the federal Court of Appeals applied the merchant exception rule to hold that a confirming memo between merchants formed a contract.

parole evidence refers to anything (other than the written contract itself)that was said,done,or written before or as the parties signed the contract.

Thomas Reep,was the president of First National Bank in Clarksville.R.L.Moore approached Reep requesting the bank to open an account in the name of Texas Continental Express,Inc.,a corporation owned by his two sons.R.L.had no affiliation with the corporation nor any financial interest in it.R.L.promised Reep that he would open several accounts in First National that would more than amount to the business of his sons.R.L.assured Reep that if anything came up in connection with the sons' account,Reep was to contract him directly.Upon these conditions,First National proceeded to furnish a regular checking account and bank draft services for Texas Continental.Sometime later,First National paid two drafts overdrawing the account by $448,942.When Reep contacted R.L.about the overdrawn account,R.L.assured Reep that money would be deposited in the account.When Reep called back a few days later to find out why the money had not been deposited,R.L.informed Reep that his wife had suffered a nervous breakdown the night before and the deal was off.First National Bank brought suit to enforce R.L.'s promise to pay the debts of Texas Continental.What is the likely outcome?

J.T.Tidwell entered into an oral contract with Robert Anthony for the purchase of 100 head of cattle at a price of $500 each.When the oral contract was made,Tidwell gave Anthony a check for $1000 as "earnest money or good faith money towards the purchase of the cattle." Anthony sold the cattle to someone else.Tidwell sued,asking the court to either compel Anthony to perform the contract or to pay damages that Tidwell suffered from the alleged breach of contract.What issues do you see and how would you resolve those issues?

Hannah orally agrees to sell her house to Brett for $175,000.If she delivers the deed to Brett with the expectation of payment in two weeks and he fails to pay,most courts will not enforce the contract since it was not in writing.

Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land.Since neither of them had any paper with them,Derek wrote the following on a napkin: "Abyan agrees to purchase from Derek a 5-acre parcel located at the local address of 123 105th Street,St.Joseph,Minnesota,U.S.A.for the price of $4,500 per acre.Transfer of title,payment,and possession to take place on May 1,2008." Abyan signed the napkin.On May 1,2008,Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price.If Derek sues Abyan for the price of the land,the most likely result will be:

Vicki entered into a written contract to buy a car from Valley Motors.During the negotiations,the sales representative said that the car had a two-year full warranty.The written contract included a provision that stated,"This writing is the full and final expression of the parties' agreement; anything said before signing or while signing is irrelevant." The written contract did not include a warranty.Two months after Vicki took delivery of the car,she discovered that the transmission needed to be replaced.Vicki claimed that it was covered by the full warranty.Will Vicki be able to present evidence as to the sales representative's statements concerning the warranty?

Jennifer has been wanting to purchase Wayne's first edition of her favorite book for a few years.Wayne has been reluctant to sell it.One evening he said to Jennifer,"Okay,I'll sell the book for $750." Jennifer replied,"Great.I accept." The agreement was not reduced to writing,but Wayne and Jennifer did shake hands.Two days later,Jennifer sent Wayne a letter outlining the terms of the agreement,and stating that she would deliver $750 cash according to the agreement before the end of the week.The letter was signed,"Best regards,Jennifer." Later,Jennifer had second thoughts - $750 was quite an amount - and refused to go through with the purchase.Nothing had been exchanged at this point.What can Wayne do?

Scott is trying to introduce oral evidence in court to alter the terms of a written contract he had with Bonnie.Bonnie has raised the parole evidence rule as an objection to Scott's testimony.In which of the following circumstances will Scott not be able to introduce the oral evidence?

Alice is president and sole shareholder of Best Fabrics,Inc.Best Fabrics,Inc.wishes to borrow money,but to do so,the bank requires Alice to orally agree to pay the debt of the corporation if Best Fabrics,Inc.cannot.Alice's guarantee to repay is:

Robin and Bellman,both merchants,orally agree to a contract for the sale of $5000 of accessories.Bellman,the buyer,sends to Robin,the seller,a written confirmation of the sale,which is sufficient against Bellman under the statute of frauds and which Bellman signs.Robin fails to perform the contract and does not ship out the goods.Bellman sues.This contract is:

Bry,Inc.and Gangl Co.entered into an oral agreement for the sale of 3,000 sweaters.Both parties performed as required under the contract.Bry delivered the sweaters and Gangl accepted and paid for them.Since the contract is fully executed,it makes no difference that it was oral.

Martin,Human Resources Director for Spring Co.,sent Lynn the following signed letter: "This letter confirms our offer to you.We will pay for your moving expenses,up to $1,500.Your starting date will be February 1,and you will become eligible for health care benefits as of May 1.You will receive a starting salary of $36,500 annually,with reviews and eligibility for increases at six months,12 months,and annually thereafter.Vacation will be for two weeks a year after one year." Spring fired Lynn eight months after she started to work,and Lynn sued arguing the letter constituted a memorandum of an oral contract for employment for five years.Is the letter sufficient to satisfy the statute of frauds?

For statute of frauds purposes,an interest in land includes:

Amanda,a recent university graduate,needed a car to get to her new job.To help Amanda secure a loan for the car,Ted,a friend,agreed to pay the loan should Amanda default.Ted's promise to pay the loan is a collateral promise.His promise must be in writing to be enforceable.

Under the statute of frauds,the writing must: be signed by the defendant; and must state with reasonable certainty the name of each party,the subject matter of the agreement,and all of the essential terms and promises.