Evelyn Vollmer orally agreed to loan Danny Lang 150,000 to make an investment in

Question

Evelyn Vollmer orally agreed to loan Danny Lang 150,000 to make an investment in a local nightclub. The loan was to be repaid from the profits received from the investment. Their agreement was never memorialized in writing, however. Eighteen months later, Lang paid only 15,000 on the loan from the profits from the business. Vollmer filed a lawsuit alleging breach of contract. Using the Information presented in the chapter, answer the following questions.

1 ) Lang claimed that repayment of the loan would "almost certainly" take over a year and that his agreement with Vollmer was therefore unenforceable because it was not in writing. Is he correct? Explain.

2 ) Suppose that a week after Vollmer gave Lang the funds, she sent him an e-mail contain the terms of their loan agreement with her named typed at the bottom. Lang did not respond to the e-mail. Is this sufficient as a writing under the Statute of Frauds?

3 ) Assume that at trial finds that the contract falls within the Statute of Frauds. Further assume that the state in which the court sits recognizes every exception to the statute of Frauds discussed in the chapter. What exception provides Vollmer with the best chance of enforcing the oral contract in this situation?

4 ) Suppose that at trial, Lang never raises that the argument that the parties’ agreement violates the Statute of Frauds, and the court rules in favor of Vollmer. Then Lang appeals and raises the Statute of Frauds for the first time. What exception can Vollmer now argue?

Explanation / Answer

Ans : 1 As per Lang’s contention regarding enforceability of agreement, the agreement is in the form of oral agreement and not written form and therefore not legal in the eyes of law as per Statute of Frauds. Under basic requirements of Statute of Frauds it is clearly given that an agreement which cannot be completed within one year should be in written form. In this contract it was no where mentioned that the specified loan amount should be repaid within a year. As per the specified requirement the basic factor is not fulfilled and hence not legal and Vollmer cannot file a lawsuit for it.

Ans 2 : As per the basic requirements of a legal agreement as per Statute Of Fraud ,the parties entering into an legal agreement must put there agreement in written form.

It must also be duly signed by both the parties to contract or at a minimum, the signature of the party that is being charged for the goods or services.

Over here in this case Vollmer first of all didn’t take the terms and conditions on paper rather she wrote a email which cannot be signed and accepted the receiving party. Ultimately the receiving party cannot sign it and the agreement is not legal under the Statute of Fraud. Here signature of Lang is most important as he is being discharged for the payment liability.

Hence not legal written form of agreement.

Ans 3 : If it is assumed that the agreement falls under the purview of Statute of Fraud and enforceable. And also the court agrees to legalise the agreement in one of the exception under Statute of Fraud, one exception can help Vollmer to prove and make oral agreement and i.e if she can prove that she created a legal written form of acceptance after there oral agreement in any form exchanged by them but it must be written. Secondly she can prove on the basis of Partial Performance. In the event the validity of an oral agreement is at question, the fact that one party has already performed his responsibilities under the agreement, may serve to confirm that a contract did exist. Under this she can prove the legality of her oral coantract under this exception. Or else last option is if the party against whom the agreement is being enforced can admit in court that there was, in fact, a valid oral agreement. But the last option is a bit difficult one as the person may not agree to do that. Hence earlier two options can be used under the exception of Statute of Fraud.

Ans : 4 : If Vollmer raises the issue for the first time she can argue on one exception , i.e the oral contract can be enforceable to the extent that Lang has accepted that Loan amount was granted to him or the Vollmer has accepted payback of loan amount of the goods covered by the oral contract. Or on the basis of partial performance accepted by Lang, the contract is legal as one party to the contract that is Vollmer has performed her duties and contract and gave loan to him, is partially performed. Plus Lang has given an amount as repayment which is not sufficient but partial consideration. In this case a court may order that the remainder of the contract be specifically performed -­that is, performed according to the precise terms of the contract.

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