Question

Sandra offered to purchase Jean's car for $3,500, and Jean accepted this offer. This contract was reduced to writing and signed by the parties, when Sandra discovered that Jean was searching for an evening gown to wear to friend’s wedding some months in the future. Sandra offered then to make a dress for Jean, but only if Jean would accept $3,200 for the car. Jean agreed to the modification and in return for Sandra's cheque in the amount of $3,200 gave her the keys to her car. Sandra finished the dress in time for the wedding, however Jean was not pleased with the final result, and declaring it worthless to her, returned the dress to Sandra and started a legal action based upon the fact that they had a written contract for the $300 balance outstanding.

a) Discuss the legal issues raised in this fact situation and render a decision. In your answer, specifically address how Sandra may counter with a defence against the document for $3,500 which is clear on its face and has her signature.

Answer 1

This is not a case to which the Statute of Frauds applies, however the parties have sat down and
written memoranda of their contract for the exchange of the car in return for $3,500. Upon the basis
of the facts given in the question there is no foundation to suggest that the memorandum of agreement would not satisfy the requirement for written memoranda, and the contract would be complete on its face. It will be on the basis of the contract being complete on its face that Jean will base her argument. Jean will further resist any attempt by Sandra to adduce evidence outside the contract by the invocation of the parol evidence rule, alleging that the contract is clear and unambiguous on its face. Sandra will have to avail herself of an exception to the parol evidence rule, and students should indicate what exceptions are available. These are the conditions precedent, the doctrine of an implied term, and the collateral agreement. Of these, the collateral agreement is the exception to the parol evidence rule upon which Sandra should rely. The parties made a separate agreement for separate consideration (being the reduction of an existing debt in return for the dress) and the collateral agreement has in effect replaced the existing written contract. As courts have a strong preference for written evidence of a contract, Sandra will have to meet the case laid out by Jean by likely bringing the dress into evidence itself (presumably in Jean's size).