As per the statute of frauds, certain types of contracts must be in writing to be enforceable by law. This law plays a vital role in protecting the parties involved in contracts from fraudulent activities that may arise from oral agreements. However, not all contracts fall under the requirement for a written agreement. Below are some of the types of contracts that generally must be in writing under the statute of frauds:
1. Real Estate Contracts: A contract for the sale of real estate properties must be in writing. The contract must contain the essential terms of the transaction, including the parties involved, the property description, purchase price, and payment terms.
2. Contracts that Cannot Be Performed Within One Year: Such contracts, which cannot be performed within one year from the date of formation, must be in writing. For instance, a contract for a service that exceeds a year, such as a three-year contract with a supplier, must be in writing.
3. Marriage and Prenuptial Agreements: Any agreement relating to marriage or prenuptial arrangements, including contracts concerning the division of property in case of a divorce, must be in writing. It is critical to note that the parties involved must have signed the agreement voluntarily.
4. Contracts for the Sale of Goods Over $500: Any contract for the sale of goods valued at over $500 must be in writing. The contract must include essential terms such as a description of the goods, the quantity, and the purchase price.
5. Guarantees or Surety Agreements: Contracts that involve guarantees or surety agreements, such as the guarantee of payment for loans or rent, must be in writing. The written agreement must include the terms of the guarantee and the identity of the person providing the guarantee.
6. Contracts for Services Rendered by Executors and Administrators: Executors and administrators of an estate must have a written agreement when they render services. This agreement must include the terms of the services, the compensation, and the identity of the parties.
In conclusion, the statute of frauds protects parties in contracts from fraudulent activities that may arise from oral agreements. Therefore, it is vital to ensure that the contracts that fall under this law are in writing. The types of contract that generally must be in writing under the statute of frauds include real estate, contracts that can’t be performed within one year, marriage and prenuptial agreements, contracts for the sale of goods over $500, guarantees and surety agreements, and contracts for services rendered by executors and administrators.