Part I in a Series about the Statute of Frauds

Let’s shake on it!!  While you may feel pride and it may give you warm fuzzies to feel like your handshake is your bond and to believe that the other party to your contract completely trusts you, you may not feel this way once the contract goes south, the parties ultimately have a different understanding of the terms of the contract or one of the parties fails to actually perform his obligations under the contract.

The most important reason to put a contract in writing is so that both parties to the contract can look at the specific terms and say, “Yes, this is what I understand the agreement between us to be.”  Think how many times you have said something to your spouse, the person who knows you better than anyone, only to find that their interpretation of what you just said was completely different from what you intended.

When contracts are not in writing, parties often find, and often times too late, that they were not of the same mind set when it came to the actual terms of an oral agreement.  There are numerous other reasons that contracts should be in writing — you can guess a few of them — however, this article covers agreements that MUST be in writing in order to be enforceable in court.

This requirement for a written contract is referred to as the “Statute of Frauds.”

In Virginia, the following contracts, with some exceptions, must be in writing in order for them to be enforceable:

1. Promises that an individual makes in exchange for marriage (prenuptials);
2. Agreements that are not capable of being performed within one year from the date of the contract;
3. Transfers of Interest in real estate (except for a lease of a year or less);
4. Promises that an executor of an estate promises to personally pay for the debts of the decedent;
5. Contracts for the sale of goods over $500.00;
6. Promises to answer for the debts of another (referred to as “suretyship”); and
7. Leases for goods where the total payment under the lease is for $1,000.00 or more.

The policy behind requiring these types of agreements to be in writing is that they are so important that the law says, “we need specific evidence to show us that such a contract exists.”  The requirement also assists in preventing fraudulent contract claims.

Be sure to read the forthcoming articles in this series, which will cover additional information on this subject, including:

• How Do I Know if My Agreement Can be Performed Within One Year?
• Has There Been Performance Such that My Contract No Longer Needs to be in Writing?
• We Have Evidence of Our Contract – Is it Enough to Qualify as a Writing?
• What if we Modify our Written Contract that Was Originally Governed by the Statute of Frauds?