Statute of frauds
Statute of frauds is the requirement that certain contracts be in writing. There are six situations in which a contract must typically be in writing that is signed by the party against whom enforcement is sought. These categories are: contracts in consideration of marriage, contracts which cannot be performed within a year, contracts for the sale of an interest in land, contracts in which the executor of a will pays a debt of the estate with his own money, certain contracts for the sale of goods, and contracts in which one party becomes a surety for another party’s debt. To satisfy the statute of frauds, the contract must contain both parties, describe the subject matter of the contract so that it can be reasonably identified, and present the terms and conditions of the parties’ agreement.
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If a contract does not meet the statute of frauds requirements, the contract is not automatically void, but it is voidable. If the contract is voidable, either party can void the contract if he wants to be released from the contract’s obligations. There are times when a party is able to enforce a contract that does not satisfy the statute of frauds. If there is partial performance, meaning one of the parties has partially fulfilled the requirements of the contract, the party who has accepted the performance will no longer be able to void the contract, and the remaining requirements of the contract must be fulfilled. The other circumstance in which a party may not be released from the contract is promissory estoppel. Under the theory of promissory estoppel, a party may not void a contract under the statute of frauds if voiding the contract would result in unfairness to the other party. Oral contracts may also be enforced under the statute of frauds if the parties have also made written notes or memos that admit the existence of an oral agreement. The memos must sufficiently refer to the terms of the contract.