Section 10.1
The Statute of Frauds
Section
10.1
The Statute
Chapter 10
Form ofofaFrauds
Contract
Section 10.1
The Statute of Frauds
Section 10.2
Special Rules and Formalities
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
What You’ll Learn
How to explain the purpose of the
Statute of Frauds (p. 206)
How to explain the legal status of a
contract that is not in writing (p. 206)
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
What You’ll Learn
How to identify the elements that must be
included in a written contract (p. 206)
How to deal with contradictory and
ambiguous terms in a written agreement
(p. 207)
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
What You’ll Learn
How to identify which contracts must be in
writing (p. 208)
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Why It’s Important
Understanding which contracts must be in
writing, as well as the elements of a writing,
will help you avoid pitfalls associated with
the Statute of Frauds.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Legal Terms
breach of contract (p. 206)
perjury (p. 206)
Statute of Frauds (p. 206)
memorandum (p. 206)
goods (p. 213)
real property (p. 213)
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section Outline
Purpose of a Writing
Elements of a Writing
Evaluating Contradictory Terms
Evaluating Ambiguous Clauses
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section Outline
Contracts That Must Be in Writing
Contracts to Pay Debts of Others
Contracts to Pay Debts of Deceased
Persons
Contracts Requiring More Than a Year
to Perform
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section Outline
Contracts That Must Be in Writing,
continued
Contracts in Consideration of Marriage
Contracts for Sale of Goods of $500 or
More
Contracts to Sell Real Property
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Pre-Learning Question
Why do you think some contracts
should be in writing?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Purpose of a Writing
In early England, contracts did not
have to be written to be fully
enforceable. Persons could be
brought to trial for breach of written or
oral contracts.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Purpose of a Writing
A breach of contract is a wrongful
failure to perform one or more
promises of a contract.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Purpose of a Writing
Only persons who were not parties to
the contract could be witnesses in
court. To protect their friends or selfinterests, witnesses often made false
statements under oath in court.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Purpose of a Writing
Making such false statements is called
perjury and is a crime.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Purpose of a Writing
To discourage such practices,
Parliament passed the “Act for the
Prevention of Frauds and Perjuries,”
which became known as the Statute
of Frauds. It required certain contracts
to be in writing to be enforceable.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Purpose of a Writing
Most states now have a Statute of
Frauds, which are state laws requiring
that certain contracts be evidenced by
a writing.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
What is a breach of contract?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
ANSWER
A wrongful failure to perform one or
more promises of a contract.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Pre-Learning Question
What elements should be present in a
written contract?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Elements of a Writing
A memorandum is the written
evidence of an agreement, need not
be formal, and could be:
a letter
a sales slip
an invoice
Understanding Business and Personal Law
a telegram
words written on a
check
Form of a Contract
Section 10.1 The Statute of Frauds
Elements of a Writing
Elements of a writing should identify
the following:
Place
Date
Parties involved
Subject matter
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Elements of a Writing
Price and terms
Intent of the parties
Signature of the party who may be
charged
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Evaluating Contradictory Terms
If changes are made to a contract, the
court will uphold the most recent
terms.
If handwritten changes are made to
a typewritten or printed contract, the
handwritten terms will prevail.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Evaluating Contradictory Terms
Typewriting prevails over printing.
A dollar amount written in words will
prevail over the amount written in
figures.
Understanding Business and Personal Law
Form of a Contract
10.1 10.1 The Statute of Frauds
Section
Contradictory Terms
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Evaluating Ambiguous Clauses
When a written contract can be
understood in different ways, the court
will lean in favor of the party who did
not draft the contract and against the
one who drafted it.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Pre-Learning Question
What type of contracts do you think
should be in writing?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts That Must Be in Writing
Every state has a law requiring that
certain kinds of contracts be in writing
to be enforceable.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts to Pay Debts of Others
A contract that one person makes with
another to pay the debts of someone
else must be in writing to be
enforceable.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts to Pay Debts of
Deceased Persons
An executor uses property from the
estate to pay off any debts.
If the estate lacks the money to pay
the debt, the executor may promise to
pay them with his or her own money.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts to Pay Debts of
Deceased Persons
Such an agreement, which is actually
an agreement to pay another’s debts,
must be in writing to be enforceable.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts Requiring More Than
a Year to Perform
All contracts must be written if they
cannot be performed within one year
of the date they are made. The year
legally begins when the contract is
made, not when performance is to
start.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts in Consideration
of Marriage
When two persons agree to marry, a
written contract is not required.
The promises they make to one
another serve as the consideration for
the contract.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts in Consideration
of Marriage
However, if one person agrees to
marry another person in return for a
third person’s promise of money or
property, then the agreement must be
in writing.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts for Sale of Goods
of $500 or More
A contract for the sale of goods for
the price of $500 or more must be in
writing to be enforceable.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts for Sale of Goods
of $500 or More
Goods consist of movable items,
including specially manufactured
items. Furniture, books, livestock,
cultivated crops, clothing, automobiles,
and personal effects of any kind are
considered goods.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
For contracts requiring more than a
year to perform, when does the year
legally begin?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
ANSWER
When the contract is made.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Contracts to Sell Real Property
Contracts for the sale of real
property, which is land and anything
permanently attached to it, must be in
writing to be enforceable.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
1. What is the purpose of the Statute
of Frauds?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
Answer
To prevent fraud and perjury
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
2. What is the legal status of a
contract that is not is writing?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
Answer
A contract that is supposed to be in writing,
but which is not, is unenforceable.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
3. What are the elements that must be
included in a written contract?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
Answer
Place, date, parties, subject matter, price
and terms, and intent of the parties.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
4. How are contradictory and
ambiguous terms in a written
agreement interpreted by a court?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
Answer
With contradictory terms, the court will
uphold the most recent terms. The court
will interpret ambiguous clauses against
the person who wrote the contract.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
5. What contracts must be in writing?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
Answer
Contracts to pay the debts of others and to
pay the debts of deceased persons,
contracts requiring more than a year to
perform, and contracts in consideration of
marriage.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Reviewing What You Learned
Answer
Contracts to sell real property and
contracts for the sale of goods of $500 or
more.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Critical Thinking Activity
Statue of Frauds
Does a writing have to be a formal
document to satisfy the requirements of the
Statute of Frauds?
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Critical Thinking Activity Answer
Statue of Frauds
No. A writing does not have to be a formal
document to satisfy the requirements of the
Statutes of Frauds.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Legal Skills in Action
History of the Law
Clark and Fiona believe that the Statute of
Frauds was originally intended as a
criminal provision designed to catch con
artists who prey on innocent, unsuspecting
victims.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Legal Skills in Action
History of the Law
Write a report in which you explain the
actual historical context in which the
Statute of Frauds was first enacted in
England.
Understanding Business and Personal Law
Form of a Contract
Section 10.1 The Statute of Frauds
Section 10.1 Assessment
Legal Skills in Action Answer
History of the Law
Reports will vary. The original purpose of
the Statute of Frauds was to discourage
the practice of fraudulent statements in
court by witnesses when an oral contract
has not been fulfilled.
Understanding Business and Personal Law
Form of a Contract
End of Section 10.1
The Statute of Frauds