Statute of frauds

The statute of frauds refers to the requirement that certain kinds of contracts be memorialized in a writing, signed by the party to be charged, with sufficient content to evidence the contract.

Traditionally, the statute of frauds requires a signed writing in the following circumstances:

In an action for specific performance of a contract to convey land, the agreement must be in writing to satisfy the statute of frauds. The statute is satisfied if the contract to convey is evidenced by a writing or writings containing the essential terms of a purchase and sale agreement and signed by the party against whom the contract is to be enforced. If there is no written agreement, a court of equity can specifically enforce an oral agreement to convey only if the part performance doctrine is satisfied. In most jurisdictions, part performance is proven when the purchaser pays the purchase price, has possession of the land and makes improvements on the land, all with the permission of the seller. No jurisdiction is satisfied by payment of the purchase price alone.

Under common law, the statute of frauds also applies to contract modifications. For example, in an oral agreement for the lease of a car, immediately after taking possession the lessor may decides that he really likes the car and make an oral offer to the lessee to extend the term of the lease by six months. Although neither agreement alone comes under the statute of frauds, the oral extension modifies the original contract to make it a fifteen-month lease, thereby bringing it under the statute as the contract now exceeds twelve months in duration. In theory, the same principle works in reverse as well, such that an agreement to reduce a lease from fifteen months to nine months would not require a writing. However, many jurisdictions have enacted statutes that require a writing for such situations.

The term statute of frauds comes from an Act of the Parliament of England (29 Chas. 2 c. 3) passed in 1677 (authored by Lord Nottingham assisted by Sir Matthew Hale, Sir Francis North and Sir Leoline Jenkins. and passed by the Cavalier Parliament), the title of which is An Act for Prevention of Frauds and Perjuries. Many common law jurisdictions have made similar statutory provisions, while a number of civil law jurisdictions have equivalent legislation incorporated into their civil codes. The original English statute itself may still be in effect in a number of Canadian provinces, depending on the constitutional or reception statute of English law, and any subsequent legislative developments.

A defendant in a contract case who wants to use the statute of frauds as a defense must raise it as an affirmative defense in a timely manner. The burden of proving that a written contract exists comes into play only when a statute of frauds defense is raised by the defendant.

This page was last edited on 14 June 2018, at 12:28 (UTC).
Reference: under CC BY-SA license.

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