The Statute of Frauds is a statute under the contract law of the United States Code. Each particular State, including the State of Florida, have their own adaptations to the Statute of Frauds which is applicable whenever a contract or an alleged contract is done within that State’s jurisdiction. Whenever a protected transaction falls under the Statute of Frauds, it is necessary for there to be a written existence where an acknowledgement of the contract by the parties involved can be discerned from the content of the written instrument.
There are some variations in the application of the statute depending upon state law.
Under Florida Law, the common contracts where the statute applies are as follows:
- Contracts involving land transactions
- Contracts providing for the duty or debt of another
- Contracts involving goods transactions (as in the Uniform Commercial Code)
- Contracts with a time period greater than one year
In order to fulfill the statute requirements, it is necessary for the writing to clearly identify the parties bound by contract, state the subject matter of the contractual agreement so that it can be understood, as well as state the terms and conditions.
The main aim of this statute is to prevent harm due to fraudulent behavior. Even though the statute has faced some criticism because of its misuse by some parties, it continues to be an effective tool against fraud. The fact that it requires important transactions such as the ones involving real estate or those with longer time periods to have their agreements made in writing makes for a strong argument in its favor.
The reason behind this is to reduce frauds and prevent litigation. Furthermore, parties can review the agreement terms and conditions before its finalization. This gives them an opportunity to scrutinize the agreement for a second time.
The statute requires the agreement to be in writing in the following circumstances:
- In case of contracts with a time period extending one year. Here, ‘time period’ refers to the time required for performance of the contract. Indefinite duration contracts are not included in this statute.
- In case of contracts involving real estate transactions – land, property and the like. This also includes easements and mortgage grants.
- Contracts made by the will executor to pay off estate debts with their money.
- Contracts pertaining to the sale of those goods that have a purchase price higher than $1000 (this may vary, depending upon the state)
Defense to an Oral Contract
In situations where there is an oral agreement instead of a written one, the equity court is entitled to enforce the verbal agreement, in case of fulfillment of the part performance doctrine. Part performance can be proven by actions such as payment of purchase price, improvements made on the property and possessing the property. Merely payment of purchase price is not enough.
Statute of Frauds in Florida
The state of Florida has variations of the statute of frauds – a different one for varying transaction types. There are 3 statutes meant for goods exceeding $500, $1000 and $5000. The state law requires a written agreement regardless of the time when the contract will be performed. The actions that are restricted by the statute are not allowed to be litigated. Litigation is prevented by a concept known as an Affirmative Defense. A successful affirmative defense will cause a Plaintiff’s claim or cause of action to be dismissed by the Court with prejudice.