Statute of Frauds

The rule that certain contracts - for land, for goods above a threshold, for guarantees and for agreements that cannot be completed within a year - must be evidenced by a signed writing, and the exceptions that let an oral deal be enforced anyway.

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What it means

Most contracts are binding even if they are only spoken. The statute of frauds, adopted in some form in every state, is the exception: for certain kinds of contract, a party cannot enforce the deal against someone unless there is a writing signed by that person. The traditional categories are contracts for the sale or other transfer of an interest in land (including most leases beyond a short term); promises to answer for another person's debt (a guarantee or suretyship); promises made in consideration of marriage; promises by an executor to pay the estate's debts personally; and agreements that by their terms cannot be performed within a year of being made. The Uniform Commercial Code adds contracts for the sale of goods above a dollar threshold, and many states add others, such as real estate commissions and loan commitments.

The writing does not have to be a formal contract. A note, letter, invoice or series of emails can satisfy the statute if, together, they identify the parties and the subject and state the essential terms, and are signed by the party against whom enforcement is sought. Electronic records and signatures count under federal and state electronic-signature laws. Between merchants, a written confirmation that the recipient does not object to promptly can bind the recipient even without their signature.

Courts also enforce some oral agreements despite the statute. For land, part performance, such as taking possession and making improvements in reliance on the deal, may be enough. For goods, the statute does not bar enforcement of specially manufactured goods, goods that were accepted or paid for, or a deal the defendant admits in court. Many states allow recovery on promissory estoppel when a party relied on the promise to their detriment. A contract that fails the statute is generally unenforceable rather than void, and the defense is lost if not raised. See also breach of contract and personal guarantees.

Where this comes from

When people hire a lawyer for this

A contracts or business litigation lawyer can tell you whether a deal you made orally or by email is enforceable, and how to paper an important agreement so the question never arises. Get advice quickly if the other side denies a deal for land or a large purchase, or if you relied on an oral promise and lost money, because the exceptions depend on facts that are easier to prove early. If you are being sued on a contract you never signed, raise the statute of frauds in your first response.

Worried about the cost? A lawyer can be hired for one part of a case only (limited-scope representation), may be paid from what a claim recovers (contingency fee), or may be free through a pro bono program or legal aid; a court can also waive its own filing fees.

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Related terms

Entries on the same subject:

• Force Majeure ClauseThe contract clause that excuses or suspends performance when events beyond a party's control prevent it, how courts read it narrowly, and the impossibility and frustration doctrines that apply when there is no clause.

Other entries in the same area of law, each written from the same primary sources.

• AppealThe review of a trial court's decision by a higher court - what can be appealed and when (the final-judgment rule and its exceptions), the notice of appeal and why missing it is fatal, what "standard of review" means and why most appeals are lost on it, preserving error at trial, the record and briefs, and what an appellate court can and cannot do with the result.
• Attorney-Client Privilege and Work ProductThe two protections that keep what a client tells a lawyer, and what a lawyer prepares for a case, from being forced into evidence - what the privilege covers and what it does not, who holds it and how it is waived, the crime-fraud exception, the separate and narrower work-product doctrine, and how each is asserted in discovery.
• Burden of Proof (Standards of Proof)Who has to prove what, and how convincingly, before a court will rule for them - the difference between the burden of production and the burden of persuasion, the three standards (preponderance of the evidence, clear and convincing evidence, beyond a reasonable doubt) and where each applies, presumptions that shift the burden, and why the burden decides cases where the evidence is in balance.
• Complaint and Answer (Pleadings)The documents that start a civil case and frame what it is about - what a complaint must contain, how a defendant answers it, what an admission, denial and affirmative defense each do, counterclaims and cross-claims, and what happens when a pleading is late, deficient or needs to be amended.
• Contempt of CourtThe court's power to punish disobedience of its own orders - the mechanism that makes a court order more than a piece of paper.
• Court Fee Waiver (In Forma Pauperis)How a person who cannot afford court filing fees asks the court to excuse them - the federal and state procedures, who usually qualifies, and what a waiver does not cover.
• Default JudgmentA judgment entered because the person sued did not respond in time - the way most consumer debt lawsuits actually end.
• Demand LetterThe letter that states a claim and asks for payment or action before a lawsuit: when one is legally required, what it should say, how settlement communications are protected, and what not to put in it.
• DepositionSworn, recorded, out-of-court questioning of a witness by the opposing lawyer, before any trial.
• DiscoveryThe pre-trial process in which each side must hand over relevant evidence to the other.
• Expert Witness (Daubert and Frye)A witness allowed to give opinions rather than only facts because of specialized knowledge - who qualifies, the gatekeeping test a judge applies to the reliability of the method (Daubert in federal court and most states, Frye in the rest), the written report and deposition that precede trial, the difference between a retained expert and a treating professional, and why a case can be lost when its expert is excluded.
• Fee Agreement and RetainerThe engagement letter that sets what a lawyer will do and how they are paid - hourly, flat or contingent fees, retainers held in trust, costs, and what to do about a fee dispute.
• Injunction and Temporary Restraining OrderThe court orders that require a party to do or stop doing something rather than pay money - the three stages (temporary restraining order, preliminary injunction, permanent injunction), the four-factor test for emergency relief, the bond the applicant must post, how an order is enforced through contempt, and why a violated order is obeyed first and challenged second.
• Jurisdiction and VenueThe three questions every lawsuit has to answer before its merits can be heard - whether the court has power over this kind of case (subject-matter jurisdiction), power over this defendant (personal jurisdiction), and whether this is the right place within the system to bring it (venue) - what each requires, how each is challenged, and why a judgment entered without jurisdiction is void.
• Limited-Scope Representation (Unbundled Legal Services)Hiring a lawyer for one defined part of a legal matter - advice, drafting a document, or a single hearing - instead of the whole case, and the written agreement that sets the boundary.
• Mediation and ArbitrationTwo ways of resolving a dispute outside a trial that are constantly confused - one produces an agreement you can walk away from, the other a decision you generally cannot appeal.
• Motion to DismissA request to end a case at the outset on the basis that, even if everything alleged is true, it does not amount to a legal claim.
• Pro Bono Legal HelpFree legal work by volunteer lawyers - what the professional rules ask of lawyers, how people of limited means are matched with a volunteer, and why it is not the same as legal aid.
• Release and Settlement AgreementThe document that ends a claim by giving up the right to bring it - normally final, and normally broader than people expect.
• Representing Yourself (Pro Se)The right to conduct your own case without a lawyer - available in almost every civil court, and held to almost the same standards as a lawyer.
• Res Judicata and Collateral Estoppel (Preclusion)The rules that stop a dispute from being litigated twice - claim preclusion, which bars a second suit on a claim that was or could have been decided, and issue preclusion, which bars re-arguing a specific issue actually decided, the elements of each, who is bound, the exceptions, and why "could have been raised" is the part that surprises people.
• Service of ProcessThe formal delivery of court papers that gives a court power over the person sued - and the step whose failure undoes more judgments than any other.
• Small Claims CourtA simplified court for lower-value disputes, designed to be used without a lawyer - and in some states lawyers are not allowed in it at all.
• Statute of LimitationsA deadline, set by statute, after which a legal claim can no longer be brought at all.
• SubpoenaA court-backed order to give evidence or hand over documents - enforceable against people who are not parties to the case at all.
• Summary JudgmentA ruling that decides a case, or part of one, without a trial because the essential facts are not genuinely in dispute.
• Vacating an Arbitration AwardWhy an arbitrator's award is so hard to overturn, the narrow grounds on which a court can vacate or modify one, the short deadline to ask, and how a winning party turns an award into a court judgment.

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