Q: Does the common law Statute of Frauds require a recording agreement to be in writing if "Term" for 60 months?
A: Great question. The issue isn't the term of the agreement. The issue is whether the agreement can be completed within 12 months. The “Statute of Frauds” requires that certain types of contracts be written and signed by all parties in order to be considered binding and enforceable. Here are some examples of contracts that the Courts have deemed most important and most susceptible to fraud, and have determined that Statute of Frauds is applicable :
any agreement that take more than a year to complete;
sale of goods worth at least $500,
and repaying the debts of others.
Again, the purpose of the Statue of Fraud is to reduce the likelihood of fraud from occurring. The written agreement would provide sufficient proof of the terms agreed to by both parties. If one party felt that they were wronged under the agreement, the written agreement would provide evidence of the "meeting of the minds".
The Statue of Frauds requires that written agreements include the signatures of both parties as well as details about the exact terms of agreement to which both parties may be held in a dispute. It is not necessary for the contract itself to be in writing, but there must be some note in writing signed by the parties in the contract, in order for the agreement to be valid.
The following types of contracts are considered invalid unless the contract itself, or a “note or memorandum thereof,” is in written form and signed by the party to be charged. [CA Commercial Code Sec. 1624]
Any agreement such that its terms may not be completed within a year.
A promise to pay the debt of another.
An agreement for the lease of a property for a period exceeding one year in length, or for the sale of real property. The party to be charged must sign the written agreement.
An agreement establishing that an agent or broker has the authority to purchase, sell, or lease real estate for a period exceeding one year.
An agreement that will not be performed during the lifetime of the promisor.
An agreement by a purchaser of real property to establish indebtedness by paying a mortgage.
An agreement to loan money worth more than $100,000 made by a person whose business is to lend.
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