The Statute of Frauds

The Statute of Frauds

Jamey J. Born
Grantham University
BA265

The Statute of Frauds

The Statute of Frauds

Johnny needs to buy a lawn mower. His lawn is relatively modest, so he began looking

for an affordable model. His friend, Mark, also needed a lawn mower. His yard was much larger,
so he went to Johnny and said Johnny, we both need a lawn mower. Why dont we go shopping
and get the lawn mower together. Johnny and Mark found a suitable lawn mower for $10,000.
Johnny actually talked to the salesmen. And the salesmen agreed to extend Johnny a loan to
purchase the lawn mower if Mark would orally contract to stand as a surety for Johnny if the
payments were not made on time. For two months, Mark uses the lawn mower more than
anyone. But then Johnny fails to make payments and the salesman sues Mark under the oral
contract. What will be the likely disposition of the case?
I presume that since Mark and Johnny were able to take the lawnmower with them and
use it then Mark must have orally agreed to the contract to stand in as a surety for Johnny. The
law requires certain contracts to be in writing in order for them to be enforceable. In this case
the contract made between Mark and salesman would have been an oral contract.
Was this contract for a sale of goods or for a sale of services? If this were for the sale of
services then Common Law would govern this transaction and if it is for the sale of goods it
would be covered under the Uniform Commercial Code, Article 2. (RL Miller & WE Hollowell,
6th ED, p. 224-225). The sale of a lawnmower is considered a sale of goods and would therefore
be covered under the UCC.
The UCC includes Statute of Frauds provisions that require written documentation or an
electronic record as evidence. Section 2-201 requires a writing or memorandum for a sale of

The Statute of Frauds

goods priced at $500 or more. In this case the cost of the lawnmower was $10,000 which is
much greater than the $500 minimum specified in article 2 of the UCC. (RL Miller & WE
Hollowell, 6th ED, p. 172)
In some states, under the UCC, if a party against whom enforcement of an oral contract is
sought admit in pleadings, testimony, or otherwise that a contract for sale was in fact made, the
contract would then be enforceable. If Mark stated that the contract was made for the amount of
$1,000 then that would be the total amount that Mark would be enforced to pay. (RL Miller &
WE Hollowell, 6th ED, p. 175)
Collateral promises, or secondary promise is when a third party makes a promise to
assume the debts or obligations of a primary party to a contract if the primary party does not
perform. In this scenario, Mark is the third party who orally contracted to assume the loan if
Johnny were to default on payments. A collateral promise such as this normally must be in
writing to be enforceable. (RL Miller & WE Hollowell, 6th ED, p. 173).
The Main Purpose Rule where the assumption is that a court can infer from the
circumstances of a case whether the main, or leading objective of the promisor was to secure a
personal benefit and thus, in effect, to answer for his own debt. (RL Miller & WE Hollowell, 6th
ED, p. 174).
I believe that a court would allow Mark to be sued and rule in favor of the lawnmower
salesman . Since Mark was considered to benefit from the lawnmower when he orally agreed to
step in as the surety and indeed did benefit since he used the lawnmower more than anyone in the
first two months. Therefore Mark is obligated and the contract need not be in writing for it to be
enforceable.

The Statute of Frauds

References
(Miller, R. L., & Hollowell, W. E. (2011). Business law: Text & exercises (6th ed.). Mason,
Ohio: South-Western Cengage Learning)