Statute of Frauds and Contractual Characteristics There are specific types of contracts that fall within the scope of the statute of frauds and thus required to be reduced to writing. There are also several different characteristics a contract can have. In this activity we look at a fictional scenario between a customer and a local jewelry store, to determine whether their agreement falls within the statute of frauds as well as the type of characteristics the contract has. Concept Review: Written contracts provide certain advantages that oral contracts lack. Disputes about the specifics of the terms in a contract are easier resolved when the terms are solidified in writing than they would be in an oral contract. There are five categories that describe the characteristics of a contract. The different characteristics arise from the way contracts are written, spoken, implied, and how they are held up in court. Case: Read the mini case and answer the questions that follow. Report: Suppose a local jewelry store is having a Mother’s Day sales event. Sammy, a 14-year-old boy, who looks like he’s over 18, sees the advertisement on his way home from school one day and decides to stop and take a look. He knew Mother’s Day was coming up and wanted to get his mother something special. After looking at several items he finally found what he was looking for, green diamond earrings to match his mother’s eyes. The earrings were $600 including tax. Since he only had $300 he decided to use his parents’ credit card which he had been authorized by his parents to use. He handed the card to the store clerk, signed the receipt, and left. 1. Required information Based on the scenario above, why is this contract voidable? Sammy lacked the capacity to enter into a contract. A contract was not signed prior to the purchase. It is against the law to sell to a minor. The store clerk fraudulently enticed Sammy to purchase the earrings. The scenario lacked an offer and acceptance. 2. Required information Suppose Sammy’s father saw the charge on the credit card and immediately went to the store to get the money back. According to the Statute of Frauds, if Sammy’s father decided to make the purchase himself, does there need to be a written contract? Yes, because the contract can be performed within a year. Yes, because the contract is for the sale of goods more than $500. No, because this is a sales agreement. No, pursuant to Uniform Commercial Code Section 2-201. No, because the contract is for the sale of goods totaling more than $500. 3. Required information Suppose that instead of being able to walk out of the store with the ring the day of the purchase, Sammy and his father must wait 6 weeks because they are out of stock. Since the ring is backordered, the store clerk decides to discount the ring by 20%. Under the Statute of Frauds, does the contract still need to be in writing? No, because the price of the ring is now below $500. No, because the item is backordered. Yes, according to the Statute of Frauds. Yes, according to store policy. Yes, according to Social Contract Theory. 4. Required information Suppose Sammy’s dad decided to make the purchase himself, and all elements of a contract were present. What type of contract would this be? Sales agreement None of these Mutual contract Valid contract Purchase agreement ((( This is a business law question )))