Statute of Frauds in California

The Statute of Frauds in California are laws under Civil Code section 1624 and CCP 1971 and that require that certain types of contracts be written and signed by all parties.

By: Brad Nakase, Attorney

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The “Statute of Frauds” provides that certain types of contracts are unenforceable unless they are in writing. The Statute of Frauds, California Civil Code section 1624, requires certain contracts to be in writing to be enforceable.

Table of Content for CA Statute of Frauds

1. What is the statute of frauds?

2. California Civil Code section 1624. Statute of frauds; Qualified financial contracts; Personal property leases; Electronic message

3. California Code Civ Proc § 1971. Creation and transfer of estate or interest in, or trust or power relating to, realty

4. California Uniform Commercial Code § 2201; Statute of Frauds

5. Annotations

What is the statute of frauds?

The statute of frauds is a legal concept that stipulates that certain types of contracts must be in writing and signed by the parties bound by the contract to be valid. The Statute of Frauds exists to obviate perjury and fraud. The codified statute of frauds are statutes requiring that certain kinds of contracts be memorialized in writing, signed by the party against whom they are to be enforced, with sufficient terms and conditions of all promises constituting contract.

California Civil Code section 1624. Statute of frauds; Qualified financial contracts; Personal property leases; Electronic message

The Statute of Frauds under Civil Code § 1624 states:

(a) The following contracts are invalid, unless they, or some note or memorandum thereof, are 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 2794.

(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 an 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 authorizing or employing an agent, broker, or any other person to purchase or sell real estate, or to lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission.

(5) An agreement that by its terms is not to be performed during the lifetime of the promisor.

(6) An agreement by a purchaser of real property to pay an indebtedness secured by a mortgage or deed of trust upon the property purchased, unless assumption of the indebtedness by the purchaser is specifically provided for in the conveyance of the property.

(7) A contract, promise, undertaking, or commitment to loan money or to grant or extend credit, in an amount greater than one hundred thousand dollars ($100,000), not primarily for personal, family, or household purposes, made by a person engaged in the business of lending or arranging for the lending of money or extending credit. For purposes of this section, a contract, promise, undertaking, or commitment to loan money secured solely by residential property consisting of one to four dwelling units shall be deemed to be for personal, family, or household purposes.

(b) Omitted

(d) Omitted

California Code Civ Proc § 1971. Creation and transfer of estate or interest in, or trust or power relating to, realty

The Statute of Frauds under CCP § 1971 states:

No estate or interest in real property, other than for leases for a term not exceeding one year, nor any power over or concerning it, or in any manner relating thereto, can be created, granted, assigned, surrendered, or declared, otherwise than by operation of law, or a conveyance or other instrument in writing, subscribed by the party creating, granting, assigning, surrendering, or declaring the same, or by the party’s lawful agent thereunto authorized by writing.

California Uniform Commercial Code § 2201; Statute of Frauds

The Statute of Frauds under UCC § 2201states:

(1)Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars ($500) or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his or her authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in the writing.

(2)Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subdivision (1) against the party unless written notice of objection to its contents is given within 10 days after it is received.

(3) A contract which does not satisfy the requirements of subdivision (1) but which is valid in other respects is enforceable:

(a)If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement;

(b) If the party against whom enforcement is sought admits in his or her pleading, testimony, or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) With respect to goods for which payment has been made and accepted or which have been received and accepted (Section 2606).

(4) Subdivision (1) of this section does not apply to a qualified financial contract as that term is defined in paragraph (2) of subdivision (b) of Section 1624 of the Civil Code if either (a) there is, as provided in paragraph (3) of subdivision (b) of 1624 of the Civil Code, sufficient evidence to indicate that a contract has been made or (b) the parties thereto, by means of a prior or subsequent written contract, have agreed to be bound by the terms of the qualified financial contract from the time they reach agreement (by telephone, by exchange of electronic messages, or otherwise) on those terms.

Annotations

The purpose of the statute of frauds is to prevent fraud and perjury with respect to certain agreements by requiring for enforcement the more reliable evidence of some writing signed by the party to be charged. Sousa v. First California Co. (Cal. App. 1950), 101 Cal. App. 2d 533.

Statute of frauds is designed to prevent fraud and cannot be invoked to perpetrate fraud. Bouchard v. Cole (Cal. App. 4th Dist. 1956), 143 Cal. App. 2d 93.

Statute of frauds relates to remedy only and not to substantial validity of contract, so that contract is not void, but merely unenforceable; it is effective for all purposes until, in attempt to enforce it by action, its invalidity is urged as defense. Mangini v. Wolfschmidt, Ltd. (Cal. App. 2d Dist. 1961), 192 Cal. App. 2d 64.

Contract not executed in conformity with statute of frauds is not void, but merely voidable. Peyton v. Cly (Cal. App. 2d Dist. 1960), 184 Cal. App. 2d 193.

When contract is merely unenforceable because within purview of statute of frauds, an action will generally lie upon a common count. Leoni v. Delany (Cal. App. 1948), 83 Cal. App. 2d 303.

When labor and services are rendered under a contract void under the statute of frauds, recovery may be had on a quantum meruit. Polderman v. C. G. Hokanson Co. (Cal. App. 2d Dist. 1958), 157 Cal. App. 2d 28.

Third persons who are in privity with party to contract can take advantage of statute of frauds in same way that contractor himself could have done. O’Banion v. Paradiso (Cal. 1964), 61 Cal. 2d 559.

Unless writing, considered alone, expresses essential terms with sufficient certainty to constitute enforceable contract, it fails to meet demands of statute of frauds. Burge v. Krug (Cal. App. 2d Dist. May 7, 1958).

Where it appears on face of complaint that agreement sued on is within statute of frauds, and fails to comply with requirement thereof, advantage of such defect may be taken by demurrer. Harper v. Goldschmidt, 156 Cal. 245.

Statute of frauds did not bar enforcement of a real estate sales agreement; because the written agreement identified the seller, the buyer, the price to be paid, the time and manner of payment, and the property to be transferred, the statute of frauds was satisfied. Gaggero v. Yura, 108 Cal. App. 4th 884.

Writing, to be sufficient under statute of frauds, must state with reasonable certainty each party to contract, land, goods, or other subject matter to which contract relates, and terms and conditions of all promises constituting contract and by and to whom promises are made. Burge v. Krug (Cal. App. 2d Dist. May 7, 1958), 160 Cal. App. 2d 201.

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