eSign Buy Sell Agreement Made Easy

E sign buy sell agreement

today we're going to discuss the statute of frauds which concerns the kinds of agreements that must be in writing in order to be enforceable if an agreement falls within the statute then having a written contract is a requirement for enforcing the promises in the agreement we'll discuss the historical origins and context of the statute the types of transactions that fall within the statute and the requirements for fulfilling the statutes itself and the consequences of non-compliance and varying judicial interpretations of the statute let's start with some historical background in 1677 the English Parliament passed the precursor to the modern American statute of frauds it was called an act for prevention of frauds and perjuries the Act was meant to prevent individuals from falsely claiming that another party had promised them something and from then suing that party for breach of the alleged contract this kind of false claim was particularly pernicious because in England at the time of the statutes enactment interested parties to litigation that is the parties who had a real stake in the outcome of the lawsuit the plaintiff and defendant were not permitted to testify in court if a claimed that be agreed to sell him a plot of land and then breach their contract then neither a nor B could testify about the alleged agreement to combat this phenomena the act for Prevention of frauds and perjuries required that certain kinds of contracts had to be in writing and signed section 4 of the Act required that no action shall be brought and let the agreement upon which such action shall be brought shall be in writing and signed by the parties to be charged therewith or some other person thereunto by him lawfully authorized for certain types of actions these included suing one for a green and failing to pay another's debts suing for violation of agreements made on consideration of marriage suing on agreements for the sale of land and suing on agreements that could not be performed within a year Section four has been widely imitated since then and as the Restatement second of contract section 110 makes clear and you can see here basically the same provisions appearing almost word-for-word section 17 of this 1677 statute of frauds govern the sale of goods it provided no contract for the sale of any goods for the price of ten pounds sterling or upwards shall be allowed to be good except the buyer shall accept part of the goods sold or give something in earnest to bind the bargain or that some note or memorandum in writing of said bargain be made and signed by the parties to be charged by such contract that section two sees a very similar counterpart in the UCC in Section two dash 201 subsection one provides that a contract for the sale of goods for a price of $500 or more is not enforceable unless there is some writing sufficient to indicate that the contract for sale has been made between the parties and signed by the party against whom enforcement asad a writing is not insufficient because it omits or incorrectly states a term agreed upon but the contracts not enforceable under this provision beyond the quantity of goods shown in the in the writing the provision only requires signing by the party against whom enforcement is sought because the seeker is not denying the existence of the contract its own to the other side but subsection three of this provision lists some exceptions a contract which does not satisfy the requirements of subsection 1 but which is valid in other respects is enforceable a if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of business B if the party against whom and forced me to sot admits in his pleading testimony or otherwise in court that a contract for sale was made or C with respect to goods for which payment has been made and accepted or which have been received and accepted admitting that a contract was made and a buyers payment or acceptance of goods is a fairly good substitute for a buyer signature but especially manufactured goods might substitute for a seller signature as an indication that the seller must have thought there was a contract or wouldn't have produced these specially manufactured goods so here's a question the statute of frauds was meant to address false allegations that agreement existed but in addressing that problem could the statute promote another kind of fraud well sadly the answer is yes it might encourage the converse concern alleging no agreement existed when in fact an agreement did without the statute of frauds we're apt to see false allegations of contract when the parties never in fact agreed but with the statute we're apt to see false denials of contracts where the parties actually did agree parties can protect themselves from denial fraud by insisting that the other side to a contract always sign an agreement then she can't deny the contracts existence while false allegations of oral contracting are much harder to disprove so we might on balance prefer the statute and rely on parties incentives to insist on written contracts to avoid denial fraud sadly parties still make many oral arguments make many oral contracts that are not reduced to writing and so the statute of frauds actually promotes some fraudulent deniers to escape liability for breaching their actual promises this is one of the reasons why the statute has been repealed in of all places the jurisdiction of its birth England complying with the statute the statute of frauds requires not only that contracts be in writing but also that they be signed think for a moment of the kinds of contracts you have entered when you shop online for instance did you sign those agreements the official comment to the UCC to 201 says that the word signed includes any authentication which identifies the party to be charged generally courts take a broad view of what constitutes as a signature the Restatement second of contracts 134 says that the signature may be any symbol or adopted with an intention actual or apparent to authenticate the writing as that of the signers so a and B agree to a contract the terms of which a makes a written record a rights okay followed by A's initial at the top of this record does this qualify as a signature by a well the answer is yes as the UCC and Restatement suggest courts have taken a broad view of what counts as a signature attended a few minutes ago the fact that many transactions now place electronically sits awkwardly with requirements that certain contracts be written accordingly in 2000 Congress passed the electronics records and signature in commerce Act also known as the e-sign act this Act provides the distinguisher contract or other record relating to a transaction may not be denied legal effect validity or enforceability solely because it's in electronic form and that a contract relating to such transaction may not be denied legal effect or enforceability because an electronic signature or an electronic record was used in its formation further almost every state has adopted the uniform electronic transaction act the only two non enacting States are New York and Washington which overlaps significantly with e-sign but is even more comprehensive in allowing you to sign for an internet contract by just clicking through so what happens if parties fail to comply with the statute of frauds failure to have a writing and a sufficient signature doesn't render an oral agreement automatically avoid rather an oral agreement that falls within the statute of frauds but is does not meet its requirement will be unenforceable at the option of the party against whom enforcement of the agreement is sought in legal terms it's voidable not void so if a and B orally agree that B will sell a several acres of land and the parties never put that agreement in writing and afterward B fails to sell the land to a a Sue's B and the contract will be unenforceable if being raises as the defense that the statute of fraud requires such an agreement to be in writing jurisdictions differ on whether a person raising the statute of frauds defense needs to promise or represent under oath that there was in fact no agreement does the seller in the land hypothetical just given above have to say there was no agreement in a deposition for example whereas there her attorney signing of a brief that reason that raises this defense is the attorney signing sufficient to make a claim of there not being a contract previously we discussed promissory estoppel and the famous section of the Restatement section 90 which is the promissory estoppel section what happens if someone makes an oral promise that falls within the statute of frauds and the other party relies upon it well section 139 of the Restatement addresses this and repeats the language at the elements of section 90 saying that the agreement is enforceable notwithstanding the statute of frauds if injustice can be avoided only by enforcement of the promise what about the UCC there's disagreement over whether promissory estoppel can be used to save an oral sales contract that falls within the statute but which is not in writing under the UCC the inconsistency extends not just between but within jurisdictions see for example the Seventh Circuit's opinion in Minetti versus Anchor Hocking corporation there the court outlined some of the arguments for and against applying promissory estoppel to save an agreement that failed to meet the statute of frauds requirements under the UCC that opinion explained that it had in past cases quote cut loose promissory estoppel from contract law and permitted promissory estoppel in statute of frauds cases but that it was having second thoughts lately so what have we learned we've learned that certain kinds of contracts must be in writing in order to be enforceable and that this requirement has deep historic origins we're familiar with the basic types of contracts that fall within the ambit of the statute of frauds contracts to buy and sell goods over $500 contracts to buy or sell real property contracts that cannot be performed within one year and contracts offering something in return for a marriage promise and finally agreements to pay another person's debt but we've also learned that parties often can pursue promissory estoppel theories just as if the agreement in question weren't one to which the statute of frauds applied