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Up to this point, we've focused on the elements of a contract and if any defenses exist that would make the contract void or voidable. Assuming that the contract remains enforceable, we now turn to determining whether the contract has the correct form and discuss how to interpret the meaning of the agreement.
As you know, a contract does not generally have to be in writing to be enforceable. However, society has determined that some agreements should require some additional proof, usually a writing, to be enforced. These agreements tend to be complex and important, hence why we agree that the party trying to enforce the agreement should have some proof that an agreement exists in the first place. Because the statute of frauds can be used to escape the obligations of a contract, courts have created a number of exceptions, which we will discuss later on.
The following are the types of contracts that require a writing under the statute of frauds:
You'll be tempted to say that the examples above all require a signed contract. Don't. Rather, the statute of frauds requires that these types of agreements must be evidenced by some writing, signed by the party to be bound. Therefore, a signed contract is not required. Rather, we look to find some memo, note, text, napkin, etc., that gives evidence that an agreement was entered.
The writing does not have to be formal or contain every detail of the agreement. However, it must be detailed enough for us to figure out what the parties agreed to. This can usually be fulfilled by naming the parties to the agreement and identifying the subject matter. If I told my fiancé that I'll give her my estate in the French Alps should she agree to marry me, whereupon I write this all on a napkin, then we have met the requirements of the statute of frauds (unless I have multiple estates in the Alps, in which case my wife would probably get her pick).
The requirement that the agreement be signed by the party to be bound can get a little tricky. As you might imagine, physically signing the document is sufficient. But what if you send an email? In such a situation, the Electronic Signatures in Global and National Commerce Act comes to the rescue. It states that any symbol logically associated with an agreement can meet the signature requirement of the statute of frauds. Therefore, if I offer to sell you my land in Driggs, Idaho and you respond via email with "I accept. - Me." I can now enforce this contract against you just as I could if you had signed a physical piece of paper.
Some contracts do not include, or contradict, an oral understanding of the parties before they signed a contract. For example, a timeshare salesperson may tell you that the timeshare will increase in value or that they'll take the timeshare back at any point if you don't want it anymore (both of which are common lies). Thereafter, the purchase documents that you sign inform you in small print that the timeshare will not increase in value and that they have no buy-back program. In determining how to resolve this conflict, the courts will utilize the parol evidence rule. Spoiler alert - the timeshare company is going to win.
This rule states that a court will not receive into evidence any prior or contemporaneous terms/agreements that contradict the terms of the parties' written contract. This makes sense. We don't want parties coming to the courts claiming that although they signed a contract saying one thing, they verbally agreed to something different before signing the contract. The court's response is simple - if that was true, you should have included it in the contract that you signed! This rule applies to all written contracts whether or not the statute of frauds requires the agreement to be evidenced with a writing.
However, as you know by now, there are going to be several exceptions to this rule:
In these situations, courts will allow the parties to admit into evidence discussions of what was said before the contract was signed in an effort to clarify what the parties meant when they signed the agreement.