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The Statute of Frauds

A “statute of frauds” refers to a statute that requires certain types of contracts to be in writing and signed by all parties in order to be enforceable. The matter is largely one of state law and state law varies from state to state. Thus, the laws of each state should be consulted for further details. Generally speaking, however, some examples of types of contracts that are within the purview of a statute of frauds are as follows:


  • a contract involving a sale or transfer of real property;
  • a contract by one person to answer for the debts of another person;
  • a contract that, by its terms, cannot be completed in one year; and
  • a contract for an amount in excess of an amount designated by statute.

The purpose of a statute of frauds is, as the name suggests, to prevent fraudulent conduct.

Usually, in order to satisfy a statute of frauds, a contract must:


  • be in writing;
  • identify all of the parties to the contract;
  • describe the subject matter of the contract with reasonable specificity;
  • detail the essential terms and conditions of the parties’ agreement; and
  • be signed by all parties.

In the event the parties to a contract within the purview of a statute of frauds fail to comply with the statute, the contract is not void as a result of the failure. The contract is, generally speaking, valid unless one of the parties refuses to perform his or her obligations. In such a circumstance, by reason of the statute of frauds, the contract is not enforceable by the non-defaulting party against the defaulting party.

Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.

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