Statute of Frauds in Contracts

Statute of Frauds

The Statute of Frauds is a legal concept that requires certain types of contracts to be in writing in order to be enforceable. This principle is intended to prevent fraudulent claims and misunderstandings in contractual agreements. The Statute varies by jurisdiction, but it generally applies to the following categories of contracts:

1. Contracts for the sale of real estate: Any agreement involving the transfer of land or property must be documented in writing.

2. Contracts that cannot be performed within one year: If a contract is not capable of being fulfilled within one year from the date it is made, it must be in writing.

3. Contracts for the sale of goods over a certain value: Under the Uniform Commercial Code (UCC), contracts for the sale of goods priced at $500 or more must be in writing.

4. Contracts to pay someone else’s debt: If one party agrees to pay the debt of another, the agreement must be written to be enforceable.

5. Contracts made in consideration of marriage: Any agreement that involves promises made in relation to a marriage must be documented in writing.

For a contract to satisfy the Statute of Frauds, it typically must include the essential terms, such as the identity of the parties, the subject matter, and the consideration. A signature from the party to be charged is also usually required.

An example of the Statute of Frauds in action is a situation where two parties verbally agree to the sale of a home. If one party later attempts to enforce this agreement in court, they would likely be unable to do so unless there is a written contract that meets the requirements of the Statute of Frauds.