Key Takeaways

  • Five main types of contracts must be in writing to be enforceable under the Statute of Frauds.
  • Written contracts provide legal clarity, prevent misunderstandings, and protect all parties.
  • Land sales, long-term agreements, high-value goods, guarantees, and marriage-related contracts fall under this rule.
  • Electronic communications may also fulfill writing requirements under the E-SIGN Act and UETA.
  • Certain exceptions may apply based on part performance or admissions in court.

There are many types of written contracts, and many contracts are legally required to be in writing in order to be considered valid and enforceable. Among them are:

  • Land contracts. As the name implies, land contracts are legally binding agreements between two or more parties regarding the sale of land, and must be in writing. Land contracts may include the purchase of land or real estate, the mineral rights within land, and mortgage agreements. However, should there be a lease agreement for under a 12-month period, then some states waive the requirement of a written contract.
  • Sale of goods that exceed $500 in value. Per the Uniform Commercial Code, if goods are being sold for over $500, then there must be a written contract in place.
  • Contracts that are to last more than one year. If entering into a contractual agreement with a person or party that is to last beyond one year, then a written contract is required. An exception to this would be if there is an indefinite time frame attached to the contract. For example, if you are hired to plan a wedding that is scheduled for 18 months in the future, then you will need to have a written contract in place, whereas if you are hired to write articles for a magazine on an ongoing basis without a set deadline, then (while a contract would be advisable) a written contract is not legally necessary. Contracts that have an indefinite time frame do not fall under the Statute of Frauds.
  • Contracts that hold you responsible for someone else’s debt. If you are cosigning a loan or in anyway agreeing to take on the debt accrued by someone else, then the contract will need to be in writing. The exception to this is if you make the promise to pay to the debtor, rather than the creditor. For example, if you are making a promise to pay someone’s credit card and that promise is being made to the financial institution (the creditor), then the agreement must be in writing, whereas if you are simply assuring the person who is carrying the debt that you will pay their bill, then a written contract is not required.
  • Contracts related to a marriage. This can include prenupitual agreements, the marriage license, and divorce agreements.

While these contracts are not immediately seen as null and void if they are not in writing, they can be considered voidable if the only contractual agreement was made verbally.

What Should Be Included

Even if the type of contract you are entering into is not required to be in writing, it is advisable that you obtain written contracts to alleviate the potential of miscommunication or misunderstanding, down the road. Additionally, should there be a breach of contract, having everything in writing can help the courts make the best determination.

To ensure your written contracts are enforceable, make sure they provide the following information:

  • The basic terms and conditions of the agreement, agreed upon by all involved parties
  • The names and contact information of all the parties to be involved in the execution of the contract
  • Clearly spelling out the duties to be fulfilled and any payment involved

Consulting with an attorney who has an expertise in contract law can be of benefit to all parties involved, as it ensures that you are clear on the parameters of the contract prior to signing it, while also ensuring it’s drafted in a way that is both clear and enforceable.

Why Certain Contracts Must Be in Writing

The requirement for certain contracts to be in writing stems from the Statute of Frauds, a legal doctrine developed to prevent fraud and misunderstandings in high-stakes agreements. Written documentation ensures a clear record of each party's obligations and intentions. Without a written agreement, proving the terms in court becomes significantly harder, especially for complex transactions like real estate sales or multi-year commitments.

A written contract also:

  • Serves as tangible evidence in court.
  • Clarifies ambiguities that could arise in verbal agreements.
  • Encourages the parties to think through the terms more carefully.

Even if not mandated by law, putting agreements in writing is generally a best practice.

Requirements for Writing a Contract

While the laws may vary from state to state regarding the specifics of how one drafts a legally binding contract and what needs to be included, there are always going to be certain requirements that must be observed. Fortunately, it is easy enough to find out the various requirements in your state by contacting either your attorney or your state’s Small Business Administration.

In addition to the previously mentioned details that will always need to be included in a contract, many times contracts will also spell out the action that can be taken, should there be a breach of contract, and the timeframe in which that action can be taken. For example, if you agree to pay a certain amount by a certain date, and you fail to do so, the contract may state that the non-breaching party will provide a grace period of one month, after which time they may pursue means by which to collect the debt.

Understanding the Statute of Frauds

The Statute of Frauds is a legal principle that requires certain contracts to be in writing to be legally enforceable. Its purpose is to reduce the likelihood of fraudulent claims and misunderstandings about essential contractual terms. The following are the 5 types of contracts that must be in writing under this doctrine:

  1. Contracts for the sale of land or real estate
    This includes agreements for the sale or transfer of land, real property, or any interest therein, such as easements and mineral rights.
  2. Contracts that cannot be performed within one year
    If a contract’s terms make it impossible to be fulfilled within one year from the date of execution, it must be written. This includes employment contracts or service agreements exceeding 12 months.
  3. Contracts for the sale of goods over $500
    Under the Uniform Commercial Code (UCC), a sale of goods valued at $500 or more requires a written agreement. Exceptions may apply for specially manufactured goods or when performance has already begun.
  4. Contracts involving suretyship (guaranteeing another person’s debt)
    When one party agrees to be responsible for another party’s debt or obligation, the promise must be in writing to be enforceable. However, if the guarantor’s promise benefits them personally, courts may waive this requirement.
  5. Contracts made in consideration of marriage
    This includes prenuptial or postnuptial agreements and other arrangements contingent on marriage, not the marriage certificate itself.

These categories are not exhaustive. State laws may impose additional requirements or exceptions.

Electronic Contracts and Digital Signatures

Modern contract law has evolved to accommodate electronic communications. The Electronic Signatures in Global and National Commerce (E-SIGN) Act and the Uniform Electronic Transactions Act (UETA) make electronic contracts and signatures legally valid in most jurisdictions.

To be enforceable, an electronic contract must:

  • Be accessible to all parties involved.
  • Clearly indicate mutual consent.
  • Be capable of being retained and reproduced.

Businesses and individuals should ensure their digital agreement processes comply with applicable state and federal laws.

Exceptions to the Writing Requirement

There are limited situations where courts may enforce an unwritten contract that normally must be in writing. Common exceptions include:

  • Partial performance: If one party has begun performing under the contract (e.g., making payments or taking possession of land), courts may uphold the agreement despite the absence of writing.
  • Admissions in court: If a party admits to the contract’s existence during legal proceedings, it may be enforceable.
  • Promissory estoppel: If one party reasonably relies on a promise to their detriment, and injustice can only be avoided by enforcement, the court may uphold the agreement.

However, relying on these exceptions is risky. A written contract remains the strongest legal protection.

Consequences of Noncompliance

If a contract that legally must be in writing is not properly documented, it may be considered void or unenforceable. This could prevent a party from:

  • Suing for breach of contract.
  • Recovering damages or seeking performance.
  • Enforcing payment or delivery terms.

Legal remedies become limited in such cases, emphasizing the importance of formalizing critical agreements in writing from the outset.

Frequently Asked Questions

  1. What are the 5 types of contracts that must be in writing?
    The five are: real estate contracts, contracts lasting over a year, sales of goods over $500, suretyship agreements, and marriage-related contracts.
  2. Are handwritten contracts valid?
    Yes. Handwritten contracts are enforceable as long as they meet legal requirements such as offer, acceptance, consideration, and clarity of terms.
  3. Can emails count as written contracts?
    In many cases, yes. Courts often accept emails as written evidence of agreements, particularly when they clearly state terms and show mutual consent.
  4. What happens if a required contract isn’t in writing?
    It may be unenforceable in court, meaning you can't sue for breach or compel the other party to comply.
  5. Are text messages legally binding contracts?
    They can be—if they clearly show an offer, acceptance, and consideration, and meet writing requirements under applicable laws.

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