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 Michigan, the statute of frauds is codified under Michigan Compiled Laws (MCL). It requires certain types of contracts to be in writing to be enforceable. These typically include contracts for the sale or transfer of real estate, contracts that cannot be completed within one year, and contracts for the sale of goods priced at $1,000 or more, among others. For example, under MCL 566.106, a contract for the sale of goods for the price of $1,000 or more is not enforceable unless there is some writing sufficient to indicate that a contract has been made. Similarly, MCL 566.108 stipulates that leases for more than a year and agreements for the sale of real estate or interests therein must be in writing. The purpose of these laws is to prevent fraud and perjury by requiring a written record of the agreements that are most susceptible to these issues. While the specific requirements can vary, the general principle is that a written document is necessary to enforce these types of agreements in Michigan.