The Statute of Frauds

• Author: Franklin G. Snyder, Mark Edwin Burge
• Pages: 259-282

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UNIT 14: THE STATUTE OF FRAUDS 259

Unit 14

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CONTRACT DEFENSES

Part Two

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The Statute of Frauds

FOCUS OF THIS UNIT

The thing that lawyers call the statute of frauds is actually misnamed. In the

United States, hundreds upon hundreds of statutes of frauds are in existence because

“statute of frauds” is the term that has come to be used for any requirement that

certain legal documents be in writing to be effective. The rules on the books today

(and the vast majority of them are in the form of a statute) do, however, all descend

from a single act of Parliament that we may correctly call the Statute of Frauds, and

it is the starting point to understand writing requirements in American contract law

today.

Begin When Writing Was Rare. In the early days of English law—the first few

hundred years after the Norman Conquest, relatively few contracts were in writing

because relatively few people could write. In Property class, you may have heard

about conveying land by livery of seisin, the transfer or formally handing over a piece

of the sod in front of witnesses. In an age when almost no laymen (or nobles, for that

matter) could write, most deals were oral.

Over time, however, growth in trade and education meant that writings

became more common and important, and more people sought to memorialize major

transactions with a writing. This was helped by a system of creating deeds that could

be recorded, so that people (especially the tax collectors) could tell who owned what.

Writing had obvious advantages over oral transactions, since the latter depended on

memory (which could be faulty) and on the honesty of the witnesses (which was not

always perfect). Because of the intricacies of British judicial procedure, a class of

professional witnesses would actually hang around courts of law waiting for work.

They would willingly swear to anything, so long as they were paid for doing so. This

situation created fertile grounds for fraud.

Parliament Acts. In 1677, Parliament passed (with the assent of King Charles

II) “An act for prevention of many Fraudulent Practices which are commonly

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260 CHAPTER V: CONTRACT DEFENSES

endeavoured to be upheld by Perjury and Subornation of Perjury”—which became

known as the Statute of Frauds. It required that certain kinds of transactions—those

of most interest to the powerful landowners who dominated the Parliament of the

day—be put in writing or else be unenforceable.

Land, for example, was the principal measure of wealth in England. A tenant

farmer could claim that his local landlord had promised to sell him the land he farmed

for £100. The farmer could bring in paid witnesses to swear to the deal, and the

landlord might lose. Landlords wanted these transactions in writi ng. Similarly, the

family structure of the upper classes meant that in important families there would

be a single head who, through primogeniture, would own most of the family property.

This means that anyone owed anything by a member of the family would always try

to seek some way of holding the rich head of the family liable. Thus, someone who

had loaned money to a younger son might try to prove that the head of the family had

agreed to stand surety for son’s debts, which again could easily be proved by oral

testimony. Or when the head of the family was appointed executor for a junior

member of the family who died in debt, the decedent’s creditors might claim that the

head of the family had promised to pay the creditors out of the head’s own large

fortune, rather than the deceased’s own small estate. Similarly, in a large household

with often hundreds of employees, it was easy for a butler or gardener to claim that

the head of the family had promised him a lifetime contract. Finally, given that most

marriages in upper-class families were arranged, and were accompanied by complex

financial arrangements, it was not uncommon for the family of the bride or groom to

claim that the other party’s family had orally promised to provide the new couple

with some estate or with some amount of money.

Thus, these heads of the family—who made up the House of Lords and most of

the House of Commons—required that these sorts of contracts be in writing to be

enforceable.

The English Statute Comes to America. The first American states received

the original English statute of frauds because they were English colonies when the

law was passed. Later states legislatively or judicially adopted the rules from these

first colonies. Since 1677, the idea of a writing requirement for certain contracts has

been extremely popular with legislatures, who have crafted thousands of specific

requirements that certain legal documents be put in writing to be enforceable.

The Statute FOR Frauds? A requirement of a writing sometimes does indeed

keep people from being bound by contracts to which they never agreed, and in that

regard, statutes of frauds live up to their name and prevent fraud. Consider, however,

that the writing requirement sometimes allows a party who actually has agreed to a

contract to escape liability because the agreement was not reduced to a writing. Even

if fifty eyewitnesses could accurately testify as to what the promisor orally contracted

to do, the contract would not be enforceable. Judges eventually found it irksome that

a party could escape liability on this kind of “technicality” when all the other