Statute of Frauds

Definition: Statute of Frauds

The Statute of Frauds is a state law that requires certain types of contracts to be in writing in order to be legally enforceable. This includes contracts related to the sale of land, mortgages, and various real estate agreements. The primary purpose of the statute is to prevent fraudulent claims and misunderstandings that can arise with oral agreements. The Statute of Frauds also serves to preserve the integrity of significant transactions by ensuring there is a clear, written record of the agreement.

For real estate specifically, the Statute of Frauds applies to:

Deeds
Mortgages
Contracts for sale or purchase of land
Assignments of contracts
Agreements that do not conform to lease terms longer than one year

Example: An oral agreement for the sale of land is unenforceable under the Statute of Frauds. If two parties agree verbally to the sale of a property but do not put the agreement in writing, the contract is not legally binding and cannot be enforced in a court of law.

Examples

Sale of Land: If Anna verbally agrees to sell her property to Bob, but there is no written contract or deed, the agreement cannot legally enforce the sale.
Mortgage Agreements: If a lender provides a mortgage to a borrower based on an oral agreement, without any written document, the borrower is not legally bound to the terms of the loan.
Long-Term Leases: Bruce agrees orally to lease a commercial property to Claire for five years. Since the lease agreement is for a period longer than one year and is not in writing, it is unenforceable under the Statute of Frauds.

Frequently Asked Questions

What is the purpose of the Statute of Frauds?

The purpose of the Statute of Frauds is to prevent fraudulent claims and disputes over certain types of transactions by requiring a written agreement that is signed by the parties involved.

Are there any exceptions to the Statute of Frauds in real estate?

Yes, one notable exception is lease agreements for periods shorter than one year, which do not have to be in writing to be enforceable.

What happens if a contract that should be subject to the Statute of Frauds is not in writing?

Such a contract is considered unenforceable. This means that if one party fails to honor the agreement, the other party cannot seek legal enforcement of the terms.

Can emails or electronic agreements fulfill the Statute of Frauds requirement?

In many jurisdictions, electronic communications, including emails that clearly detail the essential terms and include signatures (electronic or digital), can meet the requirements of the Statute of Frauds.

Does the Statute of Frauds apply to amendments to existing contracts?

Yes, any amendment to a contract that falls under the Statute of Frauds must also be in writing to be enforceable.

Deed

A legal document that represents the ownership of property. A deed must be in writing and conform to certain formalities to be enforceable.

Mortgage

A legal agreement in which a lender provides funds to a borrower to purchase property, with the property itself serving as collateral for the loan.

Lease Agreement

A contract between a lessor and lessee where the lessee gains temporary possession of a property in exchange for periodic payments. For terms longer than one year, the lease agreement must be in writing.

Real Estate Contract

A legally binding agreement between parties involved in buying, selling, or leasing property. Such contracts must be in writing if they fall under the purview of the Statute of Frauds.

Online Resources

Legal Information Institute (LII) - Statute of Frauds
Nolo - Understanding Contracts
American Bar Association (ABA) - Guide to Real Estate Law

References

“Black’s Law Dictionary” by Bryan A. Garner
“Real Estate Law (Real Estate Law (Washington))” by Marianne M. Jennings
“The Essential Guide to Housing and Property Law” by David Listokin and David T. Listokin

Suggested Books for Further Studies

“Real Estate Law” by Marianne M. Jennings
“Property Law: Rules, Policies, and Practices” by Joseph W. Singer
“Understanding Property Law” by John G. Sprankling

Real Estate Basics: Statute of Frauds Fundamentals Quiz

### What is the primary purpose of the Statute of Frauds? - [ ] To increase property taxes - [ ] To simplify real estate transactions - [x] To prevent fraudulent claims and misunderstandings - [ ] To promote oral agreements > **Explanation**: The primary purpose of the Statute of Frauds is to prevent fraudulent claims and misunderstandings by requiring certain contracts to be in writing. ### Which of the following must be in writing under the Statute of Frauds? - [ ] Oral lease agreements for six months - [ ] Oral contract for painting a house - [x] Contract for the sale of land - [ ] Verbal agreement for yard work > **Explanation**: Contracts for the sale of land must be in writing to be enforceable under the Statute of Frauds. ### Does the Statute of Frauds apply to mortgage agreements? - [x] Yes, mortgage agreements must be in writing. - [ ] No, mortgage agreements can be oral. - [ ] Only under certain conditions. - [ ] It depends on the lender. > **Explanation**: Mortgage agreements are covered under the Statute of Frauds and must be in writing to be enforceable. ### Are electronic communications valid under the Statute of Frauds? - [ ] No, electronic communications are never valid. - [ ] Only if notarized - [x] Yes, in many jurisdictions they are valid if they include essential terms and signatures. - [ ] Only if both parties consent. > **Explanation**: In many jurisdictions, electronic communications can meet the Statute of Frauds requirements if they include the essential terms and signatures. ### If a contract is subject to the Statute of Frauds but is not in writing, what is its status? - [ ] It is still enforceable. - [x] It is unenforceable. - [ ] It requires a witness to be valid. - [ ] It can be enforced verbally. > **Explanation**: A contract that is subject to the Statute of Frauds but is not in writing is considered unenforceable. ### Does the Statute of Frauds apply to contractual amendments? - [x] Yes, amendments must also be in writing. - [ ] No, amendments can be oral. - [ ] Only for leases. - [ ] Only under written request. > **Explanation**: Any amendment to a contract covered by the Statute of Frauds must also be in writing to be enforceable. ### Can a six-month verbal lease be enforceable without a written document? - [x] Yes, it is valid. - [ ] No, it must be written. - [ ] Only with a witness. - [ ] Only in certain states. > **Explanation**: A verbal lease agreement for a lease term shorter than one year can be enforceable without a written document according to the Statute of Frauds. ### What types of transactions does the Statute of Frauds mainly target? - [ ] Everyday purchases - [x] Real estate and land sales - [ ] Personal loans - [ ] Employment agreements > **Explanation**: The Statute of Frauds is mainly focused on real estate transactions and land sales, requiring these to be in written form. ### In which scenario is the use of the Statute of Frauds most relevant? - [x] Selling real estate - [ ] Hiring an employee - [ ] Shopping for groceries - [ ] Borrowing a book > **Explanation**: Selling real estate is a scenario where the Statute of Frauds is most relevant as it requires a written agreement. ### Which of the following are considered enforceable without written proof? - [ ] Sale of land - [x] Lease agreements less than a year - [ ] Mortgage agreements - [ ] Real estate purchase agreements > **Explanation**: Lease agreements for periods shorter than one year can be enforceable without a written document under the Statute of Frauds.