What is the statute of frauds?

On Behalf of | Aug 7, 2021 | Business Law |

SOF, also known as the statute of frauds, is a legal concept pertaining to contracts that should be enforced in writing. The statute is for contracts for goods worth $500 or more and contracts for the sale of land. If you live in New York and need to know more about SOF and business and commercial law, you may find this information helpful.

The history of SOF

SOF became a legal concept in the U.S. and was originally considered common law instead of being designated as business and commercial law. These days, the statute of frauds is formalized in certain U.S. jurisdictions. If SOF applies in a breach of contract case, the defendant may be able to use this to his or her advantage. This would place the burden of proof on the plaintiff, who would be tasked with proving that there was a valid contract between the two parties.

Understanding SOF

In the U.S., the statute of frauds requires certain contracts to be written and legally binding. It is important to keep the conditions of SOF in mind regarding:

  • Marriage-related promises, such as gifts like an engagement ring
  • Contracts that must be completed in over a year
  • Contracts pertaining to the sale of real estate (leases don’t need to be covered under SOF if the lease is longer than a year)
  • Contracts to pay off the debt of an estate from the executor’s personal funds (promises to pay the debt from the estate’s funds are not subject to SOF)
  • Contracts for the sale of products over $500
  • A surety, or a contract in which a person agrees to pay another individual’s debt

Consult a business attorney who will help you gain a better understanding of statute of frauds.