Meta Description: Understand the Statute of Frauds, a core legal principle requiring specific contracts—like those for real estate or agreements lasting over a year—to be in writing to be legally enforceable. Learn the “M.Y. L.E.G.S.” categories and key exceptions like partial performance.
In the world of business and personal agreements, a handshake can often seal a deal. However, when it comes to agreements of significant value or duration, relying solely on an oral promise can lead to serious complications. This is where the Statute of Frauds steps in, a fundamental legal doctrine designed to prevent fraud and perjury by requiring certain types of contracts to be documented in a signed writing.
Far from being a single, modern piece of legislation, the Statute of Frauds originated in 17th-century England and has been adopted in various forms across jurisdictions to ensure that parties are deliberate and serious when entering into major transactions. It acts as an affirmative defense in a breach of contract suit, making an otherwise valid oral agreement unenforceable if it falls under the statute’s scope.
What Contracts Are “Within” the Statute of Frauds?
The statute applies to specific categories of contracts that are deemed most susceptible to fraudulent claims. While state laws may vary, most jurisdictions follow a core set of contract types, often remembered by the acronym “M.Y. L.E.G.S.” or similar mnemonic devices.
The M.Y. L.E.G.S. Categories
- Marriage (M): Contracts made in consideration of marriage, such as premarital agreements, not mere promises to marry.
- Year (Y): Contracts that, by their terms, cannot possibly be performed within one year from the date the contract is made. If performance is even remotely possible within one year, the oral contract is generally enforceable.
- Land (L): Contracts for the sale or transfer of any interest in real property, including land, mortgages, leases exceeding one year, and easements.
- Executor/Administrator (E): A promise by an executor or administrator to personally pay the debt of the deceased out of their own estate.
- Goods (G): Contracts for the sale of goods (moveable property) for a price of $500 or more, as governed by the Uniform Commercial Code (UCC § 2-201).
- Suretyship (S): A promise to answer for, or guarantee, the debt, default, or miscarriage of another person (a collateral promise).
What Qualifies as a “Writing” and a “Signature”?
To satisfy the Statute of Frauds, the required documentation, sometimes called a “memorandum,” does not need to be a single, formally drafted contract. It simply needs to provide sufficient evidence of the agreement.
Tip from a Legal Expert: The writing must contain the essential terms of the contract, which typically include the subject matter, the parties involved, and the basic conditions of the agreement. For the sale of goods under the UCC, the quantity term is paramount.
Crucially, the writing must be signed by the party against whom enforcement is sought (the defendant). A “signature” is interpreted broadly and can include any writing, mark, stamp, or symbol intended to authenticate the document, and modern electronic signatures are generally sufficient.
Case Spotlight: The Need for Essential Terms
A recent dispute involved an oral agreement for the sale of a significant piece of commercial property. While an email chain acknowledged the deal, the court found the correspondence did not satisfy the Statute of Frauds. The emails failed to specify critical elements, such as a definitive closing date and how the existing liens would be handled. Because the “essential terms” were missing, the writing was deemed insufficient to prevent a Statute of Frauds defense, rendering the agreement unenforceable.
Critical Exceptions: When an Oral Contract is Enforceable
The law recognizes that strictly applying the Statute of Frauds can sometimes lead to an unfair result. Therefore, several key exceptions have evolved to allow the enforcement of certain oral contracts, particularly where one party has relied heavily on the promise.
1. Partial Performance (Land Contracts)
In contracts for the sale of land, if the buyer has taken actions in reliance on the oral agreement, courts may enforce it. Proving this exception usually requires a strong showing of specific actions, such as:
- Payment of all or part of the purchase price.
- Taking possession of the property.
- Making substantial, valuable, and permanent improvements to the property.
2. Promissory Estoppel
This equitable doctrine is a general safety net against injustice. If a promisor makes a clear promise that they should reasonably expect will induce action or forbearance by the promisee, and the promisee relies on it to their substantial detriment, a court may enforce the promise despite the Statute of Frauds.
Caution: Statute of Frauds and UCC Exceptions (Goods $500+)
The Uniform Commercial Code (UCC) provides specific exceptions for the
Please consult a qualified legal professional for any specific legal matters.