Statute of Frauds

The Statute of Frauds is a defense to contract enforcement that requires certain categories of agreements to be supported by a written memorandum signed by the party against whom enforcement is sought. Its purpose is to prevent fraud and perjury by requiring reliable evidence of agreements that are particularly susceptible to false claims.

The traditional categories of contracts that fall within the Statute of Frauds are captured by the mnemonic MY LEGS: Marriage (contracts made in consideration of marriage), Year (contracts that by their terms cannot be performed within one year from formation), Land (contracts for the transfer of an interest in land), Executor (promises by an executor to pay estate debts from personal funds), Goods (contracts for the sale of goods priced at $500 or more under UCC Section 2-201), and Surety (promises to answer for the debt of another).

The writing requirement is not onerous — it need not be a formal contract. A sufficient memorandum identifies the parties, describes the subject matter, states the essential terms (including price for goods), and is signed by the party to be charged. Multiple writings can be combined if they refer to the same transaction. Under the UCC, the writing for goods need only indicate that a contract has been made, identify the quantity, and be signed by the party to be charged.

Several exceptions operate to take a contract out of the Statute of Frauds even without a writing. Part performance is recognized for land contracts when the buyer has taken possession, made improvements, or paid part of the purchase price. The UCC provides exceptions for specially manufactured goods, admissions in court, and partial performance (for the quantity delivered and accepted). Promissory estoppel may also override the Statute of Frauds when a party has reasonably relied on an oral promise to their detriment and injustice can only be avoided by enforcement.