Text 3 The Statute of Frauds

An important purpose of business law is to protect and assist persons in their business dealings. One such way is to create awareness that certain types of agreements be evidenced by a signed writing in order to be enforceable. A writing is a more reliable proof of an executory agreement than is oral testimony based on memory. Also, a writing is not affected by the death or absence of witnesses. In addition, a writing helps to prevent dishonest persons from intentionally misrepresenting the facts and it prevents honest but forgetful persons from innocently doing so.

Years ago, injustices arising from the failure of memory or from intentional misrepresentations were frequently found in cases involving certain kinds of important oral contracts. Sometimes parties would lie under oath — although perjury is a crime, it was difficult to prove. The Statute of Frauds and Perjuries required that certain agreements be in writing and be signed by the party against whom the contract was to be enforced in court: the defendant in the action. Now the name statute of frauds is used to designate statutes, which require more certain contracts to be evidenced by a signed writing in order to be enforceable in court.

Thus, you should always get the other party’s signature on important contracts. Note that sometimes one party will wisely postpone signing to gain more time to think about the deal.

The statute of frauds does not prevent the voluntary performance of oral agreements that should have been in writing. It has no effect on oral agreements which have been fully performed. After all, contracts subject to the statute are not illegal if oral; they are simply not enforceable. Courts will not enforce oral contracts when the statute of frauds requires that they be in writing.

Vocabulary

dealings деловые отношения

Statute of Frauds закон, требующий, чтобы контракт имел письменную форму с подписью ответчика

perjury лжесвидетельство

voluntary performance добровольное исполнение

to misrepresent искажать

to postpone откладывать