Statute of Frauds

MBEMax wiki article — paired with the Contracts question set on mbemax.com.

One-line summary

The Statute of Frauds requires certain contracts to be in writing and signed by the party to be charged; the traditional list covers marriage, over-one-year, land, executor, goods $500+, and suretyship — with equally important exceptions.

Mnemonic

MY-LEGS — Marriage, Year (over one), Land, Executor, Goods $500+, Suretyship.

And remember the escape hatches: PUR-EMS — Part performance, Unilaterally performed, Reliance, Estoppel, Merchant confirmation, Specially manufactured.

The six categories (common-law + UCC)

1. Marriage — promises made in consideration of marriage (dowries, prenuptial-type contracts). Mutual promises to marry are NOT within SOF.
2. Year — contracts not capable of being performed within one year from the making. Test: is it possible under the terms to complete within one year? If yes (even if unlikely), not within SOF.
3. Land — sale of land or any interest in land (leases over one year, easements, mortgages, restrictive covenants). Short leases often exempt.
4. Executor — promises by an executor/administrator to answer personally for decedent's debts.
5. Goods — sale of goods for $500 or more (UCC § 2-201; proposed Article 2 revisions raised to $5,000, not adopted).
6. Suretyship — promises to answer for the debt or duty of another ("collateral" promises). Main-purpose rule: promise primarily benefiting promisor is NOT within SOF.

Writing requirements

• Must contain essential terms.
• Must be signed by the party to be charged (majority). Electronic signatures OK under E-Sign Act and state UETA.
• UCC § 2-201 more forgiving: writing sufficient to show a contract was made, signed by party to be charged, specifying quantity.

Exceptions

Common-law exceptions

• Part performance (land) — possession + payment + improvements, or a combination demonstrating contract.
• Full performance by one side in over-one-year contracts (one-sided taken out of SOF).
• Promissory estoppel / reliance — reasonable reliance causing injustice.
• Main-purpose rule — suretyship for promisor's own primary benefit.

UCC exceptions to § 2-201

• Merchant confirmation (§ 2-201(2)) — between merchants, one sends written confirmation to the other sufficient against sender; if recipient has reason to know its contents and doesn't object within 10 days, SOF is satisfied.
• Specially manufactured goods (§ 2-201(3)(a)) — goods not suitable for sale to others in seller's ordinary course and seller has begun performance.
• Admission (§ 2-201(3)(b)) — admission in pleadings, testimony, or otherwise that contract was made.
• Part performance / payment (§ 2-201(3)(c)) — to the extent goods received and accepted or paid for.

NCBE loves to test

• One-year capability. Ask whether it's possible to complete within one year, not whether it's likely. Lifetime contracts usually fall outside (life is possible to end within a year).
• Part performance in land. Typically requires two of: possession, payment, improvements.
• UCC $500 trigger. Applies to every contract — even single-unit sales.
• Merchant confirmation traps. Both parties must be merchants; confirmation must be received; 10-day objection window.
• Main-purpose rule. "If you lend my subcontractor money, I'll guarantee the loan" — if promisor's main purpose is to advance his own business, SOF doesn't apply.
• Signed writing. "Signed by party to be charged" — party resisting enforcement needs to have signed; the other party's signature is not required.
• Composite writing. Several documents can together satisfy SOF if they're connected.
• Consumer contracts (modern statutes). Various consumer-protection statutes add additional writing requirements; read carefully.
• Modification. Modification of a contract within SOF must itself satisfy SOF if the modified contract is within SOF. UCC § 2-209 — modification of contract within SOF must be in writing if resulting contract is within § 2-201.

Fast hypos

Hypo 1. Oral contract for employment "for two years." SOF applies — not capable of being performed within one year; writing required.

Hypo 2. Oral contract for employment "until the Cubs win the World Series." Not capable of performance within one year? Capable — Cubs could theoretically win within a year. Not within SOF.

Hypo 3. Oral contract between merchants for 100 widgets at $10 each. Buyer sends signed confirmation. Seller doesn't object for 12 days. Merchant-confirmation exception — SOF satisfied against seller.

Hypo 4. Oral contract for custom-painted sign, buyer repudiates after seller has begun painting. Specially manufactured goods exception; enforceable.

Hypo 5. Oral lease of vacation home for 2 years. Tenant moves in, pays rent, makes improvements. Part-performance exception in land; enforceable.

Case anchors

• McIntosh v. Murphy, 52 Haw. 29 (1970) — employment contract taken out of SOF via estoppel.
• Monetti, S.P.A. v. Anchor Hocking Corp., 931 F.2d 1178 (7th Cir. 1991) — composite writings satisfy UCC.
• Klockner v. Green, 54 N.J. 230 (1969) — part performance in land contracts.
• Stumpf v. Garvey, 1986 WL 13776 (N.H. 1986) — main-purpose rule in suretyship.

See also

• Offer and Acceptance
• Parol Evidence
• Consideration
• UCC — Sales
• Modification

Sources

Restatement (Second) of Contracts §§ 110, 125, 129, 131, 139; UCC § 2-201, § 2-209(3); E-Sign Act, 15 U.S.C. § 7001; Uniform Electronic Transactions Act; McIntosh v. Murphy, 52 Haw. 29 (1970); Monetti, S.P.A. v. Anchor Hocking Corp., 931 F.2d 1178 (7th Cir. 1991).