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Wednesday, May 25, 2022

The Statute of Frauds under the Common Law of Contracts

There's a lot to know about the Statute of Frauds for the MBE. For the relevant info on how it applies to the UCC see the post @ http://mbetutorial.blogspot.com/2018/12/the-statute-of-frauds-under-ucc.html. This post will focus on how this defense applies to the common law.

Certain agreements must be evidenced by a writing, but that writing need not be a formal contract. The writing can be a receipt, a letter, a check, etc. In general, under certain circumstances, a writing is required  that reasonably identifies the subject matter of the contract, indicates that a contract has been made, and states with reasonable certainty the essential terms of the contract. 

It's important to understand what is meant by "essential terms." It's flexible, but there must be enough in the writing to enable the court to enforce the contract. For example, in a land sale contract, a description of the land is essential, and in an employment contract the length of employment is essential. In other words, context matters. 

In addition to essential terms, a signature is required. A signature is any mark or symbol made with the intention to authenticate the writing as that of the signer. An electronic signature is sufficient.

It's worth remembering that in most instances, an oral contract is valid. But not all. The following are the agreements for which the Statute of Frauds requires a writing:

Executor or Administrator Promises to Pay Debts of the Estate: A promise by an executor or administrator to pay the estate's debts out of his/her own funds requires a writing.

Promises to Pay the Debt of Another: Careful with this one as there are a lot of angles that can get tested. A promise to answer for the debt of another requires a writing. If the main purpose, though, is to serve the interest of the promisor (as opposed to the interest of another) then the contract is not within the statute and a writing is not required. 

Promises in Consideration of Marriage: A promise the consideration of which is marriage must be in writing.

Interest in Land: This is probably the most important in the group since these contracts show up constantly in Property questions. A promise creating an interest in land requires a writing. This includes the sale of real property but also includes leases of real property for more than one year, easements involving real property of more than one year, and mortgages/other liens. Also included are fixtures and minerals or structures if they are to be severed by the buyer. 

Performance Not Within One Year from the Date of Contract: A promise that by its terms cannot be performed within one year requires a writing. Importantly, the date runs from the date of the agreement and not from the date of performance. 


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