What is Statute of Frauds?
The Statute of Frauds is the generic term now given to the set of laws that require certain types of contracts to be in writing. While many contracts may be oral and still be enforceable, a contract that falls under the Statute of Frauds must be written to have legal effect.
Historically, the Statute of Frauds developed in England in the 1600s. So many people in that era began to falsely claim that they had entered into oral contracts, the King and Parliament acted to stem the flow of perjury by passing legislation requiring various types of contracts to be put in writing. These concepts traveled with English common law to the new world.
Today, many jurisdictions have expanded on the original Statute of Frauds by requiring even more classes of contracts to be in writing. These rules are now codified in the statutes of each state. Therefore, it is always essential to consult with an attorney in a local jurisdiction if there is any issue. (Of course, Statute of Frauds concerns can be alleviated by putting all contracts in writing. That way, no one has to worry about it.) The following are classic examples of contracts which must be written:
- Agreements that cannot be completed within one year.
- Contracts for the sale of land.
- Suretyship agreements.
- Promises in consideration of marriage. Note that this does not apply to the agreement to marry, but to related contracts, such as prenuptial agreements.