Statute of Frauds: When Contracts Must Be Written

What Is the Statute of Frauds?

The statute of frauds is a legal requirement that certain types of contracts must be in writing and signed by the party to be charged in order to be enforceable. Oral agreements for these categories of contracts are generally unenforceable, even if both parties agree the deal was made.

Contracts That Must Be in Writing

The specific categories vary somewhat by state, but most statutes of frauds require written agreements for:

• Contracts for the sale of real estate. Any agreement to buy, sell, or transfer an interest in land.
• Contracts that cannot be performed within one year. If the contract by its terms cannot possibly be completed within 12 months from the date of formation.
• Contracts for the sale of goods over $500. Under UCC Section 2-201, contracts for the sale of goods priced at $500 or more must be in writing.
• Promises to pay another's debt (suretyship). A guarantee to pay someone else's debt if they default.
• Contracts in consideration of marriage. Prenuptial agreements and similar contracts.
• Contracts by executors to pay estate debts personally. When an executor agrees to personally cover estate obligations.

The mnemonic "MY LEGS" (Marriage, Year, Land, Executor, Goods over $500, Suretyship) helps remember these categories.

What Counts as "Writing"?

The writing requirement is often less formal than people expect. Courts have accepted:

• Signed letters and emails
• Text messages in some jurisdictions
• Receipts, invoices, and purchase orders
• Combinations of documents that together reflect the agreement

The writing must identify the parties, describe the subject matter, and state the essential terms.

Exceptions

• Part performance. In real estate, if the buyer has taken possession and made improvements in reliance on the oral agreement, courts may enforce it.
• Promissory estoppel. If one party reasonably relied on the oral promise to their detriment, courts may enforce the agreement despite the statute of frauds.
• Admission. If the party against whom enforcement is sought admits the contract existed, the statute of frauds defense may fail.

When to Consult a Lawyer

Consider consulting an attorney if you have an oral agreement for a transaction that may fall within the statute of frauds, or if the other party is denying an oral deal that you believed was binding.

This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.