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The Statute of Frauds and International Sales Contracts

Background

The Convention on Contracts for the International Sale of Goods (CISG) provides rules that govern international sales contracts between citizens of countries that have ratified the convention (agreement).Article 11 of the CISG does not incorporate any Statute of Frauds provisions.  Rather, it states that a “contract for sale need not be concluded in or evidenced by writing and is not subject to any other requirements as to form.”

Article 11 accords with the legal customs of most nations, which no longer require contracts to meet certain formal or writing requirements to be enforceable.  Ironically, even England, the nation that enacted the original Statute of Frauds in 1677, has repealed all of it except the provisions relating to collateral promises and to transfers of interests in land.  Many other countries that once had such statutes have also repealed all or parts of them.  Civil law countries, such as France, have never required certain types of contracts to be in writing.  Obviously, without a writing requirement, contracts can take any form.

Fact Pattern

Tom Cruise invested in a business that specializes in selling Mission Impossible memorabilia, and the venture has been profitable for him as more and more Mission Impossible movies are made.

However, in one transaction (an oral agreement with a vendor), he tried to buy 5 million of Mission Impossible related goods, but the seller changed his mind at the last minute and decided to put everything back on the plane and fly away.  This did not make Tom Cruise very happy and he tried to stop the plane from leaving but had little success.

 

Once Tom Cruise was able to get off the plane, he called you because you are still serving as his personal attorney.  Tom Cruise wants to file a lawsuit, seeking performance of the agreement but you explain to him the concept of the Statute of Frauds and how it does not exist in the country where he tried to buy the goods.  You also explain to him the difficulty of proving the existence of oral agreements.

Question Presented

Putting the lawsuit aside for the moment, what kind of practical legal and business advice would you give to Tom Cruise if he finds himself in a similar situation again?  Assuming the Statute of Frauds does not exist, how would you recommend Tom Cruise go about protecting himself in the transaction?

ould you also leave a comment for these two post?

Student 1. If Tom Cruise finds himself in a similar situation again, he should try to get the seller to agree to a written contract. This will help to avoid any misunderstandings or disputes about the terms of the agreement. Tom Cruise should also make sure that he understands the laws of the country where he is trying to buy the goods, and he should consult with an attorney before entering into any agreements.I would recommend that Tom Cruise try to negotiate a written contract with the vendor before entering into oral agreement. If he is unable to do so, I would advise him to get any oral agreement that is reached in writing, and to have the other party sign it.

Student 2. As is said in the prompt, proving the existence of oral agreements is difficult and unreliable. In future situations, Tom Cruise must plan ahead and make sure he can prove that an agreement exists between him and a vendor. These agreements/contracts can be made with an impartial witness present, they can be recorded, or they can take written form. They do not, however, have to comply with any Statue of Fraud. All that matters is he somehow makes his especially important contracts enforceable via proof. I would also advise him not to chase after planes in a similar fashion again if he wishes to continue conducting business and selling MI memorabilia.