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The Statute of Frauds - Explained - YouTube
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Okay. When does a contract have to be in
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writing to be enforceable or another way
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of saying in that is what is the statute
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of frauds and when does that apply?
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So basically some contracts are enforceable
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without being reduced to writing that is
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they can be verbal and they can be
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completely enforceable, other contracts
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generally have to be in writing in order
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to be enforceable and that rule is known
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as the statute of frauds. Okay. So what's
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the reason for this well as the name
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implies there has to be sufficient
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writing between the parties that
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identifies the key terms of the contract
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sufficient to identify the goods being
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exchanged, the parties to the contract, so
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that fraud cannot be committed in the
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relationship, so that's general rule. So
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what type of contracts have to be in
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writing to be enforceable well there are
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a number of them the first and most
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common is land or real estate, any
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contract for the sale of an interest in
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land or real estate has to be in writing
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that could be to actually sell the
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property and fee simple or it could be
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simply to grant a lesser estate in the
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land such as a lease or a easement or
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life estate or something like that a
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lesser interest in land, all of those
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types of transfers of an interest in
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property must be in writing to be
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enforceable. Okay.
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Another situation would be a promise to
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pay the debt of somebody else,
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so say for example you have student
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loans and in order to get those student
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loans you had to have a cosigner perhaps
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a parent or a friend or family member
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co-signed, they are in effect
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guaranteeing that in the event you do
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not pay off those student loans that
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they will pay it that is making a
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promise to pay the debts of another and
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again that has to be in writing. Okay. Yet
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another example is a contract that is
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not capable of being performed within a
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year in a period less than two
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less than 12 months. Now the key to
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that is to understand there has to be a
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strict impossibility of performing it or
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performing the duties under the contract
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within a 12 month period. Now the
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law doesn't look toward the difficulty
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of performing the contract rather it
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looks to see if there is a stated period
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of time in there, so if you tell me that
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you're going to grant me a service
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contract on a good that you sell me for
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a period of 366 days, okay, that's more
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than 12 months that's more than a year
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there is no way possible that you can
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perform 366 days worth of work in less
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than one year, so with that being said
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that is an impossibility so that
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agreement or that contract has to be in
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writing to be enforceable. Okay. And
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another and perhaps the most commonly
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known statute of frauds rule is the sale
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of goods for a value of $500 or more has
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to be in writing to be enforceable. Okay.
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That's a good a piece of personal
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property of $500 value or more any
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contract for the sale or exchange of of
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that good has to be in writing to be
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enforceable. Okay. Now there are
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exceptions to the statute of fraud and
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we'll talk about those in a different
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video but generally these are the areas
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of law that require the contract to be
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in writing, other examples that vary from
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state the state would be for example
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insurance contracts generally they are
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required to be in writing as well. Okay.
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