More Contracts Confusion

There are certain situations in which a contract must be in writing. These situations fall under The Statute of Frauds and how this effects you in court depends on your state. It’s a way for a defendant to get off of his contractual duties by raising the defense there is no contract because the deal did not comply with the statute of frauds.

If you swear on a bible on a live TV show that you will pay $1,000 for that puppy in the window and the seller accepts your offer, there is still not an enforceable contract when there is no written agreement. Right now the SOF kicks in at $500. It the future states may adopt the new higher amount of $5,000 proposed by the people who sit around and propose these things, but the chances are in your state its $500.

There are a few other situations that an animal person might run into that fall under the SOF, but we will leave out the ones that aren’t animal related. Thee sale of real estate must always be written. Anything that will take longer than a year must always be written. Other things that are more then $500 may fall into an exception, but if you have reached he point where you need to use a SOF defense you already need a lawyer so my purpose is to just tell you what must be in writing and let you use that pen and paper for 1 minute to avoid having to play the exception game in court.

Remember, we are talking about contracts here and not bills of sale or receipts, but something that falls under a promise for a promise for valuable consideration which usually means some future act. When you put down a deposit on a horse that’s a contract for a purchase. When you lease out or lend out or re-home a horse that’s a contract. If you contract for a years worth of hay or a months worth of training it’s a contract.

The SOF says you need a signature, a price and a description. So if buyer gives you a deposit check and puts 10% of sales price for horse in the memo line you have a contract. If buyer hen tries to deny a contract under the SOF, you have a signed writing against the party to be charges, a price and a description. Can you see why its called the SOF? Its hard for buyer to deny he meant to buy horse is handed you that check. It prevents a fraud on the court. It prevents people from saying Nuh uh! I have never promised to buy that horse! It does not protect you from fraud, it protects judges from lying lairs denying the contract in court. Its one more reason to understand verbal agreements are binding or there would be no SOF and its also another reason to get it in writing anyway!

If you sell a horse for more then $500 (or tack or hay) and you do this more then a few times you may be considered a merchant. Merchants fall under the Uniform Commercial Code and specifically article 2. When you give that poorly written bill of sale that’s says Buyer buys Rusty as is for $500 you just formed a contract with the buyer that satisfies the statute of frauds if you sign it and picked up a whole lot of other responsibilities along the way.

The SOF can be overcome by partial performance. If you contracted to buy hay for a year and you get the first few deliveries and make the first few payments, then a judge can see there was an actual contract in place. If you call before your first expected delivery and ask for your hay and seller says what hay? He can argue the SOF in court. No writing, no contract, no hay.

And why am I spending so much time educating non-lawyers about contracts? Why not just give you a cut and pasted response I ripped off of Wikipedia? Because, if its really a huge deal you will be hiring a lawyer anyway, but if you have a small claim (small to the courts but not to you!) you may just go to small claims court and try and do it yourself. The problem is you have to ask the judge for the proper laws to be applied and the proper remedies to be given. If you don’t ask for the right thing you lose, even if you really did have a good claim in some other from of law.

If you understand what a contract is and isn’t you will not go to court asking for relief on a breach of contract claim only to be dismissed or thrown out because there is no contract. You would need to use some other law, but the judge can only do what you ask him to in your complaint. He can’t change your pleadings to match our actual claim. You may have a tort claim or a consumer protection claim or a fraud claim and you are in there babbling on about contracts. The judge can’t help you. It’s just like a kids game and you must use the magic words. Your statute of limitations is usually much longer under a contract claim then other claims too.

Many of the problems I see most are verbal agreements that fall under the SOF. Luckily, many lawyers slept through that part of contracts class, but I wasn’t one of them. I went to law school with over 30 years experience in the animal industry and I applied everything I herd in class to how that would matter in an animal situation. And since everyone else was sleeping off their hangovers I asked question after question for every conceivable snafu I could think of in the many common practices among the daily dealing of the average animal owner.

Take a few minute and think of some situations you have been in where knowing about contracts could have helped.

Get it in writing but make sure that writing is enough!