The statute of frauds is the general name for each state’s statute (law) that requires certain contracts to be in writing—or to have a written memorandum that records the essential elements of the agreement—in order to be enforceable.

Statutes of fraud are an exception to the general rule that verbal or oral contracts are just as enforceable as written contracts.

Statutes of fraud are designed to prevent fraud and perjury (lying under oath) in transactions that are especially susceptible to fraud.

Statutes of fraud vary from state to state, but generally include (1) contracts for the sale or lease of real estate (land); (2) contracts that cannot be performed within one year from the date of the contract’s formation—such as a two-year employment contract; (3) loan agreements in excess of a certain amount; (4) contracts involving engagement promises (return of engagement rings), marriage (prenuptial agreements), or cohabitation (support, responsibilities) and post-cohabitation support (palimony); (5) contracts for the sale of goods above a certain amount (often $500); (6) promises to pay an estate’s debt from the personal funds of the executor; and (7) contracts in which one person agrees to pay the debt of another person.

In California, the statute of frauds is codified primarily in Sections 1624 of the California Civil Code and Section 2201 of the California Commercial Code. These laws require certain types of contracts to be in writing to be enforceable. The types of contracts typically covered by the statute of frauds in California include: agreements for the sale or lease of real property, contracts that cannot be performed within one year, suretyship agreements where one person agrees to pay the debt of another, contracts for the sale of goods priced at $500 or more, and agreements to loan money or extend credit in an amount greater than $100,000, except when the credit is secured by real property. Additionally, California requires that prenuptial agreements be in writing. These requirements are intended to prevent fraud and perjury by providing clear evidence of the terms of significant transactions.