Statute of Frauds
The Statute of Frauds is a state law requiring that certain contracts be in writing in order to be enforceable. The purpose is to prevent fraudulent claims of an oral contract that never existed, and to reduce disputes over the terms of oral contracts that did exist.
There are six general categories of contracts that fall within the Statute of Frauds, and thus are unenforceable unless in writing:
- promises made in consideration of marriage, such as "I'll marry you if your father can hire me!"
- promises that cannot possibly be performed within one year
- promises creating interests in land (notably, for purchase of land)
- promises by executors or administrators of estates to pay debts out of their own funds
- agreements for the sale of goods for $500 or more, unless within several exceptions
- promises to pay the debt of another, as in acting as a surety
These six categories are often remembered by use of the mnemonic MY LEGS (Marriage, Year, Land, Executor, Goods, Surety), with each letter standing for one of the exceptions. The one involving land is the most well-known.
The statute can be satisfied by a written agreement signed by the plaintiff in the action pending before the court.
Alternatively, if there is a partial performance of the obligation entailed by the contract, together with detrimental reliance in an action for equitable relief in quasi-contract.
- ↑ Note that lifetime contracts can potentially be performed within one year, if the person were to die within the year.
- ↑ But leases less than one year are usually not governed by the Statute of Frauds.
- ↑ Oral contracts for goods are enforceable if (i) specially manufactured, (ii) between merchants and confirmed afterwards in writing without objection, (iii) admitted in pleadings in court, and (iv) partial payment was made, or delivery was accepted.