Statute of Frauds

     Samuel Goldwyn, co-founder of MGM, is reported to have said that "an oral contract is worth the paper it is written on."  His practical insight is only partially mirrored in the rules of contract law.  Many agreements are enforceable as contracts even if not evidenced by any writing or electronic record, although proof of the existence of an oral agreement may be more difficult than proof of the existence of an agreement that is evidenced by a writing or electronic record.  However, some agreements, identified in the statutes adopted by each of the fifty states, are not enforceable as contracts unless evidenced by a sufficient writing or electronic record that is signed by the party against whom enforcement of the contract is sought.  Note that such agreements need not be entirely in writing.   Rather, there must only be a writing sufficient to indicate that a contract has been made.  The following is typical statutory language:  "The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent: . . .   [list of contracts]" (emphasis added).  Recall from Commentary.Electronic communication, that an electronic record will satisfy the requirement of a writing and an electronic signature will satisfy the requirement of a subscription (i.e. signature) by the party to be charged or the party's agent.    

     Each state has adopted more than one statute identifying agreements that must be evidenced by a writing, but, in common legal parlance, judges, lawyers, and legal scholars typically refer to the group of such statutes in any one state and even to all such statutes throughout the United States simply as the Statute of Frauds (singular), a name derived from "An Act for Prevention of Frauds and Perjuries" enacted by Parliament in 1677.   Technically it would be more accurate to refer to the group of such statutes as the statutes of frauds (plural), but you would likely draw a quizzical look if you used that phrase in legal circles (not to mention the looks you would draw in other circles).  In California, for example, the following statutes are among those that condition enforceability of an agreement upon a sufficient signed writing (for which an electronic record and signature may now also suffice):   Cal. Civ. Code 1624 (a variety of kinds of contracts); Cal. Uniform Commercial Code 1206 (sale of personal property for more than $5,000, other than personal property governed by Articles 2, 8 and 9 of the Commercial Code, e.g., sale of a copyright);  Cal. Civ. Code 2922 (mortgage on real property);  Cal. Uniform Commercial Code 9203 (certain security interests on personal property), Cal. Fam. Code 1611 (premarital agreements) (requires the entire agreement to be in writing).  Briefly skim those statutes simply for a feel of the kinds of agreements covered.  Any kind of agreement not identified in the Statute of Frauds is enforceable (if provable) even without a record.

     It would be time consuming and not particularly fruitful to study each category of agreement covered by the various statutes of frauds. Therefore, we study instead only one example, UCC 2-201 (adopted in California with trivial amendment as Cal. Uniform Commercial Code 2201) governing contracts for the sale of goods for the price of $500 or more ($5,000 or more in amended UCC 2-201).  Study of this one example should suffice to familiarize you with the policies underlying the Statute of Frauds and the issues presented when a party claims its application.  Problem.Dispute.Purchase of juke box presents an opportunity to apply UCC 2-201.       

    Supplementary reading:  Farnsworth, 6.1-6.12; White and Summers 2.1-2.8.