Statute of Frauds
Lesson:
The statute of frauds is a legal doctrine that requires some contracts to be in writing and signed in order to be legally enforceable.
Any contract involving at least one of the following are required to be in writing:
- Contracts that entice a party to consider marriage
- Contacts that cannot be performed within one year
- Contracts involving land rights and ownership
- Contracts requiring an executor of a will to pay an estate's debt with his own funds
- Contracts requiring a third-party to guarantee a loan or debt
- Contracts involving the sale of goods with a total value of at least $500
The reason the statute of frauds exists is that the existence of oral agreements are often too difficult to prove.
It should be noted that even if the statute of frauds does not require an agreement to be in writing, other laws may cover the contract.
You're an accountant, trying to figure out if your client needs to consider the statute of frauds before proceeding further.
This is what you've been told:
- The executor of the will promised the funeral home director that he would cover the cost of the burial services from his own pocket to ensure the deceased was interred promptly.
Does the statute of frauds apply and require the agreement to be in writing?
Answer:
- Yes. The statute of frauds does apply and the agreement should be in writing.
Explanation:
-
Contracts requiring the executor of a will to pay an estate's debt with his own money must always be in writing and signed. Note that this does not include new liabilities.