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Chapter 18 and 19 Notes

by: Kendall Davis

Chapter 18 and 19 Notes ACCT 324 - 002

Kendall Davis
GPA 3.8

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About this Document

September 9, 2016; notes that includes examples given in class
Survey of Commercial Law
Julius David Johnson (P)
Class Notes
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This 3 page Class Notes was uploaded by Kendall Davis on Friday September 9, 2016. The Class Notes belongs to ACCT 324 - 002 at University of South Carolina taught by Julius David Johnson (P) in Fall 2016. Since its upload, it has received 7 views. For similar materials see Survey of Commercial Law in Accounting at University of South Carolina.


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Date Created: 09/09/16
Chapter 18 Notes­ September 9, 2016 Contracts Subject to Statute of Frauds  Contracts that have to be in writing acronym: MY LEGS:   Marriage: prenuptial agreements  Year: contract that cannot be performed fully in one year has to be in writing;  *lifetime contracts do not have to be in writing (because you could die, lifetime is not guaranteed so it is possible to be done in a year); only if the contract is impossible to  be performed within a year  Land: any contract for the sale or purchase of land  Executor: contracts in which the executor promises to pay the debt of an estate with  the executor’s own money  Goods: contracts for the sale of goods totaling more than $500  Suretyship: paying for the debt of another  o Main Purpose Document: the only exception is when the person who is paying is  only doing it to benefit themselves    Writing requirements for Statute of Frauds o Common Law­ written contract must clearly indicate:  Parties to contract  Subject matter/purpose of agreement  Consideration given by both parties  Significant terms (price, quantity, etc.)  Signature of party plaintiff seeks to hold responsible under contract (i.e.  signature of defendant) o Uniform Commercial Code (UCC)­ Written contract for sale of goods must  include:  Quantity of goods  Signature of defendant o No specific form that the writing has to take  Can be in separate documents; a memo; even an email    Exceptions to Statute of Frauds Writing Requirement o Admission: statement made in court, under oath, or at some state during a legal  proceeding in which defendant admits that oral contract existed (even though  contract was originally required to be in writing) o Partial Performance  Ex. if parties agree to exchange land for money; not in writing but one  party has “partially performed” and given money and started making  changes to the land; similar to promissory estoppel o Promissory Estoppel: Legal enforcement of otherwise enforceable contract, due to party’s detrimental reliance on contract  Ex. someone moving out to California with the oral promise of a job o Miscellaneous exceptions recognized by Uniform Commercial Code (UCC):  Examples—Oral contracts between merchants, oral contracts for customized  (“specially manufactured”) goods  Ex. shirts with company logo/monogram     Parole Evidence Rule: common law rule stating that oral evidence of agreement made  before or contemporaneously with written agreement is inadmissible o Lends stability, predictability and integrity to written contracts o Exceptions  If contracts are subsequently modified  If contracts conditioned on orally agreed­upon terms  If contracts are not final, part written and part oral  If there are ambiguous terms  Incomplete contracts, left out something  Obvious typographical errors; ex. spelled out different number than typed  numerically  Void or voidable contracts; ex. minors  Evidence of prior dealings of usage of trade  Integrated Contracts: written contracts within statute of frauds intended to be complete  and final representation of parties’ agreement o General rule: anything previously discussed doesn’t matter unless its in the  contract Chapter 19­ Third Party Rights  Obligor: Contractual party who owes duty to other party in privity of contract  Obligee: Contractual party owed duty from other party in privity of contract o In bilateral contracts, both parties are both an obligee and obligor  Assignment: rights; transfer of rights under a contract to a third party  Assignor: party to contract who transfers his/her rights to a third party  Assignee: party (not in privity of contract) who receives transfer of rights to a contract o Most contract rights are assignable o Except:  Rights that are personal in nature  Rights that would increase obligor’s risks/duties  Rights in a contract that, by its terms, expressly forbids assignments  Rights whose assignment prohibited by law/public policy  Delegation: Duty; transfer of duty under a contract to a third party  Delegator: party to a contract who transfers his/her duty to third party  Delegatee: party (not in privity of contract) who receives transfer of duty to a contract  Contractual duties that cannot be delegated o Duties personal in nature: ex. If you wanted Van Gogh to paint your painting, he  cannot delegate it to someone else o Duties resulting in performance substantially different from that which obligee  originally contracted (i.e. delegates performance will vary significantly from  delegator’s); ex. a lawyer with years of experience cannot delegate his duties to a  new lawyer o Duties with an anti­delegation clause  Third Party Beneficiary Contracts: o Intended Beneficiary:  o Promisor: party to contract who made promise that benefits third party o Promisee: party to contract who owes something to promisor in exchange o Example: when Joe promises the professor that he will pay his debt at bar none if  the professor cuts his grass  Joe: promisor  Professor is promisee  Bar none is intended (creditor) beneficiary o Donee beneficiary:  Ex. if you name your wife your beneficiary for your life insurance policy,  your wife is your donee beneficiary o Vesting: maturing of rights, such that a party can legally act on the rights o Incidental beneficiary: third party who unintentionally gains benefit from contract between other parties.  Ex. if you want to build a house at the beach on a lot that is trashed, and  enter into a contract to build a house because the benefit they would  receive of their property value going up was incidental


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