The Statute of Frauds in Arizona: Enforcing a Business Contract

Any businessperson is aware that when other resolution options are exhausted, a party to a valid contract can typically turn to the courts for enforcement or for a breach of contract. Even oral contracts are enforceable, albeit with a few caveats.

Under Arizona’s Statute of Frauds, to be enforceable by a court, certain types of contracts must meet a set of specific criteria. By learning more about the Statute of Frauds, you can ensure that you get the benefit you are seeking in a contract.

Statute of Frauds requires writing and signature

There are two prerequisites for bringing a court action for an agreement that falls under the Statute of Frauds. First, there must be some written memorandum of the agreement. Note that this requirement does not mean that the entire contract has to be in writing; rather, that there is some written record evidencing the transaction that must, in some cases, contain certain essential elements of the agreement. What constitutes such a writing is generally construed broadly, and even electronic records like emails may satisfy the requirement.

The second prerequisite is that the writing must be signed by the party against whom enforcement is sought, or by someone who is lawfully authorized by that party to sign on their behalf. Again, the signature requirement is construed broadly; for example, an email signature or a name typed at the bottom of an email may fulfill the requirement.

Agreements to which the Statute of Fraud applies

Some of the less common contracts to which the Statute of Frauds may apply include:

  • Agreements by an executor or administrator of an estate to pay debts or damages owed by the testator out of his or her own assets
  • A promise made by any person to pay for the debt or default of someone else
  • Any agreement that includes as consideration the promise to marry, excluding marriage agreements made with consideration consisting entirely of an exchange of mutual promises to marry
  • Agreements making an arrangement by which an employee or agent is to buy or sell, for a commission, real property for a commission
    More common types of contracts that may fall under the Statute of Frauds include:
  • Contracts to sell goods valued in excess of five hundred dollars (unless the buyer accepts some of the goods, either actually receiving them or giving a part payment)
  • Agreements to sell real property, or a lease agreement for a longer period of time than one year
  • Contracts that are not to be, or cannot be, performed within a year from the time they were entered into
  • Provisions made by will, or any agreement that by its own terms will not be transacted until after the death of the promisor
  • Promises to make a loan or extend credit that involve more than a quarter of a million dollars and that are not made for family, household or personal ends.

Contact an Arizona contracts attorney for help

The Statute of Frauds helps ensure that there is adequate evidence of certain types of contracts that may otherwise be next to impossible to enforce. But, while its aims are laudable, it can also lead to complex situations, and sometimes unjust circumstances. In the latter case, even if the contract is not enforceable, quasi-contract remedies for unjust enrichment may be available. If you need help navigating the Statute of Frauds, or if you are seeking enforcement of a contract or a remedy for breach of contract, the help of an Arizona contracts attorney is essential.

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