Legal Definitions - Statute of Frauds and Perjuries

The term Statute of Frauds and Perjuries refers to a legal principle that requires certain types of contracts to be in writing and signed by the parties involved to be legally enforceable. Its purpose is to prevent fraud and perjury (false testimony) by ensuring that significant agreements are not based solely on unreliable oral promises.

Historically, this statute was enacted to reduce the risk of people falsely claiming the existence of an oral contract or misrepresenting its terms, which could lead to unjust outcomes if there was no written proof. While often simply referred to as the "Statute of Frauds," the full name emphasizes its dual goal of preventing both fraudulent claims and false swearing in court.

Common types of contracts typically covered by the Statute of Frauds include:

• Contracts for the sale of land or real estate.
• Contracts that cannot be performed within one year from the date they are made.
• Contracts to guarantee the debt or obligation of another person.
• Contracts made in consideration of marriage (e.g., prenuptial agreements).
• Contracts for the sale of goods above a certain monetary value (though this is often covered by the Uniform Commercial Code, a modern version of the principle).

Here are some examples illustrating the application of the Statute of Frauds and Perjuries:

• Example 1: Real Estate Sale

  Imagine Sarah verbally agrees to sell her house to Mark for $300,000. They shake hands and agree on a closing date. A week later, Sarah receives a higher offer and decides to sell to someone else. Mark is upset and tries to sue Sarah to force her to sell him the house. Under the Statute of Frauds and Perjuries, Mark's claim would likely fail because contracts for the sale of real estate must be in writing to be enforceable. Without a written agreement signed by Sarah, there is no legally binding contract, and Sarah is not obligated to sell to Mark.

• Example 2: Long-Term Service Agreement

  A small business owner, David, verbally hires a marketing consultant, Emily, for a two-year project to completely rebrand his company. They discuss the terms, including payment and deliverables, but never put anything in writing. Six months into the project, David decides he wants to terminate Emily's services because he's unhappy with the progress. Emily argues they had a two-year contract. Because this agreement could not be completed within one year, the Statute of Frauds and Perjuries would typically require it to be in writing to be enforceable. Without a written contract, Emily might struggle to prove the existence of a two-year commitment, and David might be able to terminate the arrangement without penalty for the remaining period.

• Example 3: Guaranteeing Another's Debt

  When John's friend, Lisa, wanted to buy a new car but had poor credit, John told the car dealership, "Don't worry, if Lisa doesn't make her payments, I'll pay for it." The dealership, relying on John's verbal promise, approved Lisa's loan. Several months later, Lisa defaults on her car payments. The dealership then tries to collect from John. However, because John's promise to pay Lisa's debt was not in writing and signed by him, the Statute of Frauds and Perjuries would likely prevent the dealership from legally enforcing John's verbal guarantee. Promises to answer for the debt of another person generally must be in writing to be enforceable.