Statute of Frauds
Definition - What does Statute of Frauds mean?
The statute of frauds is a general term for the laws pertaining to some, but not all, contracts. They were created to deter or minimize the risk of deceit, misrepresentation or other such treachery. As such, they stipulate that agreements pertaining to certain transactions are documented in writing. They also stipulate that these contracts cannot be enforced unless they are signed by at least one of the parties involved.
Justipedia explains Statute of Frauds
The statute of frauds is important because it includes rules that protect parties involved in certain contractual agreements. These laws also reduce the risk of misunderstandings and ensuing litigation.
The rules can vary from place to place. However, the statute is universally applied to certain arrangements. These include deals that will take more than a year to complete; real estate transactions; and sales of materials that exceed a specified value.
Other contracts to which the statute always applies are those in which someone takes responsibility for another person's debt; those in which the person legally responsible for an estate uses their own money to meet financial obligations; and some made by engaged or married couples.