New Jersey Real Estate Salesperson · Contracts
Statute of Frauds
On this page 6 sections
In 30 seconds
The Statute of Frauds requires certain agreements, including any contract to sell real estate and leases longer than the statutory period, to be written and signed by the party to be charged. The tested distinction is that an oral land contract is not void but unenforceable: valid, yet a court will not compel it.
Why this matters
An oral agreement to sell land feels like a deal to the parties, and the exam tests whether you know a court will refuse to enforce it because the writing is missing.
The college version
In normal terms
- Contracts for the sale of real property, leases longer than the statutory period (commonly one year), and, in states that require it, broker compensation agreements must be in writing and signed.
- The signature that matters is the signature of the party to be charged, meaning the person being sued to perform.
- The writing must contain the essential terms: the parties, the property, the price, and the signatures, so that a court can tell what the deal was without oral testimony.
Concepts in this outline
- Agreements that generally must be in writing — the categories the Statute of Frauds covers; an oral agreement in these categories is unenforceable in court, though not void.
- Sale of real property — every contract to convey an interest in land, including houses, lots, and condominium units, must be written and signed by the party to be charged.
- Leases exceeding the statutory period — leases longer than the period the state sets, commonly one year, must be in writing; shorter leases may be oral (see Topic 08).
- Broker compensation agreements where required — in states that require it, a listing or buyer representation agreement promising a fee must be written and signed to be enforceable.
- Essential terms and signatures — the writing must identify the parties, the property, and the price, and carry the signature of the party against whom enforcement is sought.
Eli explains
The same idea, in plain words
Explain it like I’m 10
Long ago, lawmakers noticed that people lied in court about spoken promises involving land, so they made a rule: for the most important agreements, no writing means no enforcement. That rule is the Statute of Frauds, and every state has a version.
For real estate, it catches three kinds of agreements. First, any contract for the sale of real property, including land, a house, or a condominium unit. Second, a lease longer than the statutory period, commonly one year; a shorter lease may be oral (see Topic 08). Third, in states that require it, a broker compensation agreement promising the broker a fee.
Writing alone is not enough. It must be signed by the party to be charged, the person against whom enforcement is sought, and must state the essential terms: the parties, the property, the price or rent, and the signatures.
An agreement that fails the statute is not void. Both unenforceable and void contracts fail in court, but only the unenforceable one was a real agreement the parties may still honor voluntarily (see Topic 07).
Worked example
At a backyard barbecue in Montclair, Walt tells his neighbor Renata that he will sell her his Victorian for a price they agree on, and they shake hands. A week later Walt gets a better offer and backs out. Renata is upset and calls a licensee, Sofia, who explains that a sale of real property must be in writing and signed by the party to be charged, here Walt, before a court will make him perform. Nothing was written, so the handshake deal is unenforceable, even though both of them meant it. Sofia adds that Walt could still honor the promise voluntarily, but Renata cannot force him.
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