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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.
Frequently Asked Questions
Is a verbal agreement legally binding?
Often yes. Oral contracts are enforceable in many situations if there’s an offer, acceptance, and consideration. The catch is proof, since it’s hard to show what was agreed without a document. Certain categories must be written to be enforceable at all, including land sales and agreements that can’t be performed within a year. Rules vary by state, so check with a local attorney.
Does an email count as a writing for contract purposes?
Frequently yes. Courts in many jurisdictions have treated emails and other electronic records as sufficient writings when they contain the essential terms and show the party’s assent, and electronic signature laws support that. What counts still depends on the jurisdiction and the facts. Relying on an email chain as your contract is risky, though, because essential terms scattered across messages invite disputes.
What contracts have to be in writing?
The classic categories include sales of land or real property interests, agreements that can’t be completed within one year, promises to answer for another’s debt, contracts made in consideration of marriage, and sales of goods above a dollar threshold set by state law. States have added their own categories over time, so the list isn’t uniform. Confirm the rule where you’re located.
