What is the Statute of Frauds?

The Statute of Frauds sounds like it should have more to do with Tort law than contract law, but it is a central issue in contract enforcement.  Specifically, it address the enforceability of certain oral contracts.

  • The Statute of Frauds is a doctrine that only applies to oral contracts.  It requires that there be sufficient evidence of certain types of oral contracts or it causes them to be unenforceable.
  • The Statute of Frauds applies to specific categories of oral contracts which include the following:
  1. Suretyship contract (promises to pay the debt of another)
  2. Promise to pay personally the debts of a decedent
  3. Promise made in consideration of marriage
  4. Land contracts
  5. Contracts that, by their terms, cannot be fully performed within 1 year from the date of their making.
  6. Contracts for sale of goods over $500.00.

All the above categories of contracts need to be in writing or be evidenced by performance or a “memorandum” or other sufficient writing.  The issue of the statute of frauds is ones of enforcement and not formation.  The contract may be properly formed, but because it is an oral contract which falls into one of the prohibited categories, it cannot be enforced in a court.

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