Statute Of Frauds

The Statute Of Frauds

February 26, 2021

The Statute of Frauds: An Origin Story

The Statute of Frauds was created in 1677 in England. (Feel free to read the original text.) According to Black’s Law Dictionary, the Statute of Frauds declared certain contracts were unenforceable if they were not committed to writing and signed by the parties involved.

The modern day version is somewhat simpler to digest. North Dakota has codified the Statute of Frauds at N.D.C.C. § 9-06-04, which reads:

The following contracts are invalid, unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged, or by the party’s agent:

  1. An agreement that by its terms is not to be performed within a year from the making thereof.
  2. A special promise to answer for the debt, default, or miscarriage of another, except in the cases provided for in section 22-01-05.
  3. An agreement for the leasing for a longer period than one year, or for the sale, of real property, or of an interest therein. Such agreement, if made by an agent of the party sought to be charged, is invalid unless the authority of the agent is in writing subscribed by the party sought to be charged.
  4. An agreement or promise for the lending of money or the extension of credit in an aggregate amount of $25,000 or greater.
  5. An agreement or promise to alter the terms of repayment or forgiveness of a debt that is in an aggregate amount of $25,000 or greater.

Why Does the Statute of Frauds Exist?

The purpose and intent of the Statute of Frauds is to prevent fraud and perjury. McDougall v. AgCountry Farm Credit Services, PCA, 2020 ND 6, ¶ 17, 937 N.W.2d 546. There are many situations where friends, business partners, or complete strangers will enter into agreements that involve one of the contracts contemplated by the Statute of Frauds. By reducing these agreements to writing, the Statute of Frauds protects both parties from contract terms that either party may not have remembered, or more importantly, didn’t agree to. The Statute of Frauds protects the parties from acts of fraud (misstating or misrepresenting the terms of the agreement) or perjury (lying about the terms of the agreement).

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