Lecture Notes: Statute of Frauds

Overview

• Common Misconception: Non-lawyers often believe agreements must be in writing to be enforceable.
• Reality: Oral agreements are generally as enforceable as written contracts, except in specific cases.
• Statutory Requirement: Certain types of contracts must be in writing according to statutory law to prevent fraud.

Statute of Frauds

• Origin: Known as the "statute of frauds," enacted by all states.
• Purpose: Prevent fraud by requiring written evidence for specific contracts.
• Source: Section 110 of the Second Restatement of Contracts outlines common contract types under this statute.

Five Common Contract Types Under the Statute

1. Executors of Estates: Contracts by executors to fulfill the obligations of the deceased.
2. Debt Responsibility: Contracts where one agrees to pay another's debt (e.g., parent guaranteeing a child's loan).
3. Marriage Consideration: Contracts made upon the consideration of marriage.
4. Interest in Land: Contracts for the sale or lease of land exceeding one month.
5. Performance Within One Year: Contracts that cannot be completed within one year from making (must be impossible).
   • Example: Lifetime employment contract is not within the statute.
   • 50-year employment contract is within the statute.

Uniform Commercial Code (UCC)

• UCC Section 2-201: Applies to sale of goods contracts.
  • Most recent version: $5,000 threshold.
  • Older version: $500 threshold.

Agreements Within and Outside the Statute

• Within the Statute: Requires writing to be enforceable.
  • Writing must show a real transaction and be signed by the defendant.
  • Exceptions may take the transaction outside the statute.
• Outside the Statute: No writing requirement.

Satisfying the Statute

• Writing Requirements (State Statute):
  • Signed by the party to be charged.
  • Identifies subject matter.
  • Indicates a contract.
  • States essential terms with reasonable certainty.
• UCC Requirements:
  • Signed by the party to be charged.
  • Indicates a sale contract.
  • Does not require all essential terms or correct terms.
  • Writing should suggest a real transaction.

Conclusion

• Key Point: For contracts within the statute, ensure compliance with writing requirements or applicable exceptions to enforce the agreement.