Duhaime's Law Dictionary


Statute of Frauds Definition:

A statute that set a minimum standard for enforceable contracts, usually requiring at a minimum something in writing or the actual exchange of reciprocal obligations, at least in part.

In Case Corporation v Hi-Class Business Systems, Justice Mosely of the Court of Appeals of Texas wrote the majority decision which included this:

"The Statute of Frauds is an affirmative defense. It is intended to prevent fraud and perjury in certain kinds of transactions. It provides that certain promises and agreements are unenforceable unless they are in writing and signed by the person sought to be charged."

The original statute of frauds was that of England in 1677.

Historically, a contract for the transfer of a legal interest in land entailed a complex assortment of legal procedures and officers, including those points of detail necessary to accommodate the requirements of a feudal system.

By the 1600s, the exigencies of commerce were such that the formalities were overwhelming and often not complied with. Custom was thus changed so that land, in at least some circumstances, could be transferred based only on oral contract, albeit with a bit of ceremony.

In the result, wrote C. Browne in 1895:

"... great danger was incurred of such transfers being attempted to be proved by false and fraudulent means."

Statute of FraudsIn an earnest attempt to arrest fraud and ensure that contract cases seeking judicial recognition or enforcement had, at a minimum, one or several of minimal requirements as set out in statute, primarily aimed at, but not limited to,  requiring an instrument of sale in writing for any transfer of an interest in land.

The 1677 statute, inspired by Roman and civil law, was described by Baker as providing:

"... that no contract for the sale of goods for more than £10 should be good unless the buyer accepted part of the goods and actually received them, or gave something in earnest to bind the payment or in payment, or there was writing."

But the statute had the opposite effect. To use the words of Henry Reed: "It has been said to cause more fraud than it prevented."

The English courts tried to stem the tide but to only partial avail. Eventually, even those in commerce began to ignore its impractical provisions. In most jurisdictions where the statute survives at all, it is limited to real property: e.g., in order for a contract purporting to dispose of land to be enforceable, it must be in writing.

REFERENCES:

  • Baker, J. H., An Introduction to English Legal History (London: Butterworths-LexisNexis, 2002), page 350.
  • Browne, Causten, A Treatise on the Construction of the Statute of Frauds as in Force in England and the United States (Boston: Little, Brown and Company, 1895), page 4-5.
  • Case Corp. v. Hi-Class Business Systems, 184 SW 3d 760 (2005)
  • Duhaime, Lloyd, Contract Law, Part 7: Interpretation of Contracts
  • Reed, Henry, A Treatise on the Law of the Statute of Frauds and of Other Like Enactments in Force in the United States of America and in the British Empire (Philadelphia: Kay & Brother, 1884), pages 1-3.

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