Notes: I. Avoid oral contracts. 2. Have all contracts written and signed by the parties thereto.. § 47. Written Contracts The written contract need not be a formal document. Two letters, one making a proposition and the other accepting it, constitute a contract just as much as a legal document duly signed and sealed and acknowledged before a notary. The written contract should contain all the terms-the names of the parties; a statement of the consideration, with the time and the method in which it is to be paid or performed; a clear statement of just what is agreed upon, when it is to be done, and in what manner; together with any arrangements the parties wish to make if something happens to render the contract impossible of performance, or in case it is only to be performed under specified conditions. (See Chapter XCVIII, “Drafting a Contract.") Business men are accustomed to expressing themselves clearly, concisely, and explicitly in their letters. Letters and copies are always carefully filed and preserved. For this reason when legal assistance is dispensed with, a letter from the party making the offer and a reply from the party accepting or rejecting it are usually the most satisfactory method of securing a written contract. Each party has his own. records. Since they are accustomed to expressing themselves by letter, they understand what they have agreed to better than if the terms were expressed in formal, legal phraseology. Even if a lawyer is called in later, the exchange of letters is a good way of making an agreement. If there is an extended correspondence before the parties finally arrive at an agreement, the last letter should sum up all the terms on which they have finally agreed, and this should be answered by a simple letter of acceptance, repeating the terms as therein stated. (See Chapter C, Forms 13, 14.) Note: I. Write all contracts. Never trust to an oral under standing. § 48. The Statute of Frauds In order to do away with the uncertainty of relying on people's memories in contracts by word of mouth, there was passed in England in 1676, a law called the Statute of Frauds, which required certain contracts to be in writing. This statute has been copied into the law of most of the states of the Union. The Statute of Frauds requires that the contract shall be proved by some memorandum in writing. It is not necessary to make the memorandum at the time the contract is agreed upon. If any memorandum or letter containing the essential terms of the contract, i.e., the names of the parties, the consideration, and enough to show the nature of the agreement, and signed by the party to be held, is written at any time before the other party comes into court to enforce the contract, the requirements of the law are satisfied. Form of the Memorandum. The memorandum must be signed by the party against whom it is to be enforced, or he will not be liable under it. It need not be signed by the other party. Under the law as enacted in some states, this signature must be at the end; in others it is sufficient if it is put in any part of the memorandum with the intention of signing. This written memorandum need not be one paper; it may be written on two or three sheets if all refer to each other plainly and together make a complete memorandum of the terms of the contract. At an auction or a sheriff's sale, the auctioneer or the sheriff is the agent for both of the parties and may sign a memorandum for either of them. Contracts Which Must Be in Writing. The following contracts must be proved by a written memorandum: I. A contract where the consideration is marriage. 2. The promise of an executor or an administrator to pay a claim against an estate which is in his charge out of his own money. If any property of the estate is left, the claim will be payable out of that, but in any case the executor or the administrator will not be liable personally unless there is a written agreement. 3. A promise to be responsible for the debt, the default, or the miscarriage of another. This means a contract of suretyship or guaranty, which will be explained later. (See Part XIII, "Suretyship.") 4. land. A contract for the sale of land or of any interest in This does not refer to a deed, but to a contract to give a deed. A deed must always be in writing. A deed which is not in proper form to operate as a deed may sometimes operate as a contract to sell the property, and the party will be compelled to give a good deed. A defective deed cannot be corrected without much trouble. If a person makes a contract to sell or to buy land through an agent, the agent must in most states be given authority in writing to sign the contract. Growing things, such as trees, grass, and plants that come up of themselves every year are regarded as part of the land, and a contract to sell or to buy them must be in writing. Crops which have to be planted every year are not regarded as part of the land even while they are growing. A lease of real property, if it is to last for over a year, must usually be in writing. 5. A contract which is not to be performed within a year from the time it was made. A contract which might possibly be performed in a year, although it might take longer, need not be in writing to be enforceable. It is always better, however, to have such a contract in writing. 6. A contract for the sale of personal property of over a certain fixed amount in value. (This is explained fully in Chapter XVII, "The Statute of Frauds.") Note: I. $49. Contracts Under Seal The use of the seal is a survival from the time when very few people could read or write. The seal was used on the most important documents as we use a signature today. Because of the importance that was attached to it then, the seal is still used on documents of the greatest importance. Deeds and mortgages of land, and in some states wills, must be under seal. A power of attorney to deed land also requires a seal. A seal on any document, such as a deed or a contract, is regarded as showing that there was consideration for the deed or the agreement whether any is mentioned in the document itself or not. In this country, however, a person is usually allowed to prove that there was no consideration, even if there is a seal. A seal may in many states be merely a scroll. In others a little red wafer is used. In New York the letters L.S. (locus sigilli, the place of the seal) which were originally intended as instructions as to where the seal should be placed, are now regarded as a sufficient seal. A corporation generally verifies papers, particularly important documents, with its corporate seal. A contract under seal is also called a contract by specialty. The word "covenant" is applied as follows: (1) It may be a written agreement under seal; (2) It may be a modifying agreement contained within a deed or other sealed instrument; (3) It may be a clause of an agreement contained in a sealed instrument. Note: I. Seals are generally required in connection with legal papers dealing with real estate, on bonds, and sometimes on wills. § 50. Contracts of Record Contracts may be distinguished as to whether or not they are of public record; that is, filed or recorded in some court or public office. The highest form of contract of record would be a judgment, which may be called a contract of record although it lacks any element of a contract. It may be founded upon a contract, but when a judgment has been secured so that it is of record, it becomes a claim that can be collected at any time at the option of the party in whose favor it has been rendered. Another form of contract of record is what is called a recognizance. In certain legal procedures a party is required to give bond or furnish surety that he will appear before the court at a certain time or that he will keep the peace, observe the terms of an injunction, or do some other thing. Though this is a compulsory proceeding, and has no single trace of an agreement or a consideration, it is nevertheless called a contract of record. Other contracts of record are deeds, mortgages, contracts to convey land, or other instruments which, after being acknowledged before a notary public, are filed or recorded in the office of registry for record for the particular locality. Acknowledgment is a prerequisite to registration. (See |