Legal Definitions - S/F

S/F stands for STATUTE OF FRAUDS.

The Statute of Frauds is a legal principle that requires certain types of contracts to be in writing to be legally enforceable. Its primary purpose is to prevent fraud and perjury by ensuring that there is reliable evidence (a written document) for significant agreements, rather than relying solely on verbal promises that can be easily disputed or misrepresented.

Here are some examples illustrating the Statute of Frauds:

• Example 1: Real Estate Purchase

  Imagine a situation where Sarah verbally agrees to sell her house to Mark for a specific price. They shake hands and agree on a closing date. However, before any papers are signed, Sarah receives a higher offer from another buyer and decides to sell to them instead. Mark tries to sue Sarah to enforce their verbal agreement.

  How this illustrates the term: In most jurisdictions, contracts for the sale of real estate fall under the Statute of Frauds. This means that for Sarah and Mark's agreement to be legally binding and enforceable, it would need to be in writing, signed by both parties. Since their agreement was only verbal, it is likely unenforceable under the Statute of Frauds, protecting Sarah from a lawsuit based solely on an unwritten promise regarding land.

• Example 2: Long-Term Employment Contract

  A startup company verbally offers a new CEO a five-year employment contract with a substantial salary and benefits package. The CEO accepts the offer and begins working. After six months, the company's board decides they want to go in a different direction and attempts to terminate the CEO without cause, arguing there was no formal written agreement.

  How this illustrates the term: Contracts that, by their terms, cannot be fully performed within one year are typically subject to the Statute of Frauds. A five-year employment contract clearly falls into this category. For the CEO to have a legally enforceable claim to the full five-year term, the employment agreement would need to be in writing and signed by both the CEO and an authorized representative of the company. Without a written contract, the company might be able to argue the agreement is unenforceable beyond the "at-will" employment standard, depending on local laws.

• Example 3: High-Value Sale of Goods

  A vintage car collector, Mr. Henderson, verbally agrees to buy a rare 1965 Mustang from a private seller, Ms. Chen, for $75,000. They discuss the details over the phone and agree on a price and delivery date. A week later, Ms. Chen informs Mr. Henderson that she has decided not to sell the car to him, as she received a better offer.

  How this illustrates the term: Under the Uniform Commercial Code (UCC), which governs the sale of goods in the U.S., contracts for the sale of goods priced at $500 or more must generally be in writing to be enforceable. Since the vintage car's price of $75,000 far exceeds this threshold, Mr. Henderson's verbal agreement with Ms. Chen would likely be unenforceable under the Statute of Frauds. To have a legally binding contract, they would have needed a written agreement, such as a bill of sale or purchase agreement, signed by Ms. Chen.