11.3 Sufficiency of the Required Writing

Now that we’ve set out the types of agreements where the contractual intentions must be evidenced by a writing, it is time to understand what is required to provide enough evidence of the agreement such that it will be enforced in situation where a writing is required.

Writing Requirement under the Common Law

When asked to think about a contract, you might picture a student loan document you recently signed, or your insurance policy, or even the license agreement for your Apple Account. These are all written documents that would satisfy the writing requirement under the common law, but much simpler documentation will also suffice in many cases. For example, written documents like a check, a receipt, a written notation on an envelop, and other simple documents also satisfy the requirement of a writing under the common law.

The writing need not contain every term, but it must recite the subject matter of the contract in a way that would be understandable in the context of the transaction. For example, a written agreement to buy a parcel of land is usually sufficiently definitive if it refers to the parcel in such a way that it could be mistaken for no other—for example, “seller’s land in Allentown,” assuming that the seller owned only one parcel there. Beyond the subject matter, the essential terms of promises to be performed must be written out; but all of the little details need not be. If an essential term is missing, it cannot be enforced, unless it can be inferred or imposed by rule of law. A written contract for the sale of land containing every term but the time for payment, which the parties orally agreed would be upon delivery of the deed, is sufficient. (A contract that omitted the selling price would not be.)

The parties must be named in the writing in a manner sufficient to identify them. Their whole names need not be given if initials or some other reference makes it inescapable that the writing does concern the actual parties. Reference to the agent of a party identifies the party. Possession of the writing may even be sufficient: if a seller gives a memorandum of an oral agreement for the sale of his land, stating all the terms, to the buyer, the latter may seek specific performance even though the writing omits to name or describe him or his agent. 

In a few states, consideration for the promise must be stated in writing, even if the consideration has already been given. Consequently, written contracts frequently contain such language as “for value received.” But in most states, failure to refer to consideration already given is unnecessary. The situation is different, however, when the consideration is a return promise yet to be performed. Usually the return promise is an essential term of the agreement, and failure to state it will vitiate the writing.

Writing Requirement Under the UCC

In contracts for the sale of goods, the writing must be signed by the party to be charged, and the parties must be sufficiently identified.  The quantity of the items purchased must also be set forth in the writing. But consideration, including the selling price, need not be set forth for the memorandum to meet the requirements of the UCC, though obviously it makes sense to do so whenever possible. By contrast, UCC Sections 1-206 and 3-319 concerning intangible personal property and investment securities require “a defined or stated price.”

Electronic Communications

The Electronic Signatures in Global and National Commerce Act, S. 761, popularly referred to as ESign, pertains to documentation of agreements in electronic form. The primary impact of Esign is to make almost anything reasonably indicative of a signature good enough electronically. It provides the following:

Notwithstanding any statute, regulation, or other rule of law [other than subsequent parts of this same statute], with respect to any transactions in or affecting interstate or foreign commerce—

a signature, contract, or other record relating to such transaction may not be denied legal effect, validity or enforceability solely because it is in electronic form; and

a contract relating to such transaction may not be denied legal effect, validity or enforceability solely because an electronic signature or electronic record was used in its formation.…

The term “transaction” means an action or set of actions relating to the conduct of a business, consumer or commercial affairs between two or more persons, including any of the following types of conduct—

• the sale, lease, exchange, or other disposition of [personal property and intangibles]
• the sale, lease, exchange or other disposition of any interest in real property, or any combination thereof.

The term “electronic signature” means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.