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Statute of Frauds
Practical Law Glossary Item 2-553-0606 (Approx. 4 pages)
Glossary
Statute of Frauds
A common law doctrine requiring certain kinds of contracts to be in writing to be enforceable. The statute of frauds is satisfied if the contract:
- Is evidenced by a writing or writings.
- Contains the essential terms of a contract.
- Is signed by the party against whom the contract is to be enforced.
- Has enough information to evidence the parties' intent to enter into a contract.
The statute of frauds has been adopted by statute in most states. In addition to a state's general statute of frauds provisions, statute of frauds provisions typically can also be found in a state's adopted version of the Uniform Commercial Code (UCC). Although each jurisdiction's requirements may vary, the statute of frauds generally covers these types of contracts:
- Contracts for the sale of goods priced $500 or more (UCC § 2-201).
- Contracts made by executors and administrators.
- Suretyship agreements.
- Agreements in contemplation of marriage.
- Contracts that are not to be performed within one year.
Many states cover other classes of contracts, such as contracts that provide:
- A special promise to answer for the debt, default, or miscarriage of another.
- A subsequent or new promise to pay a debt discharged in bankruptcy.
- Compensation for services rendered in connection with negotiating a loan.
- Agreements that create a security interest in personal property if the property is not:
- in the secured party's possession;
- a certificated security; or
- collateral that consists of deposit accounts, investment property, letter-of-credit rights, or electronic chattel paper if the secured party has control over such collateral.
- A lease of goods contract under which the total payments due are more than $1,000 (UCC § 2A-201).
For state-specific guidance on the statute of frauds, see Contract Basics for Litigators: State Q&A Tool: Questions 2 and 3. For more information about the statute of frauds, see Practice Note, Signature Requirements for an Enforceable Contract: The Statute of Frauds and Uniform Commercial Code.