what is the statute of frauds in tennessee?
Some History About the Statute of Frauds
Way back in 1677, the Parliament of England passed a law titled “An Act for prevention of Frauds and Perjuryes,” the purpose of which was
“the prevention of many fraudulent Practices which are commonly endevoured to be upheld by Perjury and Subornation of Perjury.”
Practically speaking, the law required a signed writing in order to bring legal action under certain circumstances.
The Statute of Frauds in Tennessee
Like many other jurisdictions, Tennessee has codified this centuries-old law (now commonly known in many countries as the Statute of Frauds) in the Tennessee Code Annotated, making it applicable to every citizen of the state. Our statute of frauds can be found at Tenn. Code Ann. § 29-2-101.
Specifically, § 29-2-101 states that no legal action can be brought against a party to the following contracts unless the contract is in writing:
Any special promise to answer any debt or damages out of such person’s own estate.
To answer for the debt, default, or miscarriage of another person.
To charge any person upon any agreement made upon consideration of marriage.
Any contract for the sale of lands, tenements, or hereditaments, or the making of any lease thereof for a longer term than one (1) year.
Any agreement or contract which is not to be performed within the space of one (1) year from the making of the agreement or contract.
There are a few other commercial applications included in the statute which I didn’t reproduce here, but the important point is that there are contracts listed there that are pretty common for all of us, namely those for real estate.
An Example of the Statute of Frauds in Action
Recently, a client asked me whether her act of verbally agreeing to sell her home to someone constituted a binding contract. They had agreed upon a price, an amount of earnest money, and a timeline for closing, but hadn’t drawn up a contract for the sale yet.
After they had their conversation, another interested buyer contacted her about potentially buying the house, and for more money. Being honest with herself, she admitted she would rather sell to the second buyer. What could she do? She’d already reached an agreement with the first buyer to sell the house to him.
The answer is to look to the Statute of Frauds. Under that section of the Code, any contract for the sale of lands must be in writing and must be signed by the party against whom enforcement is to be sought. In this example, there was no writing memorializing the agreement, and thus there was no writing signed by my client. Effectively, the agreement to sell the home did not exist, because it wasn’t in writing.
This may seem counter-intuitive to many individuals, especially in the Southern United States where handshake deals are common; however, the statute protects parties to large and commonly expensive deals by requiring the terms of a deal be in writing and signed by the parties. This not only combats nefarious acts, such as lying, misrepresentation, etc., but also against more benign “weaknesses” of the human condition, such as our poor memories and tendencies to remember events in a light most favorable to ourselves.
Ask for Help
Keep in mind as well that the Statute of Frauds is not the only defense against an action for specific performance (asking the court to force a party to a contract to hold up their end of the deal), but it is an important one. The best bet for anyone who may be in some contractual hot water is to contact an attorney and get an expert opinion as to where they stand.
If you have questions about a contract and would like an expert to review your paperwork, book a consultation today.
