What is the Statute of Frauds?

The Statute of Frauds is a law in North Carolina that requires certain written agreements to be legally binding. North Carolina General Statute 25-2 states that any agreement for the sale of real estate, transfers of title to real estate, leases for more than three years, contracts that cannot be performed within one year, and contracts that involve the payment of more than $500 must be in writing and signed by the relevant parties. The Statute of Frauds was first enacted in England in the 1600s and has been adopted in the United States in various forms. In North Carolina, it is intended to preserve and protect legal contracts from false accusations of non-fulfillment by either party. The statute protects parties from being pressured into agreements that they would later regret. It also protects parties if an agreement is not honored due to confusion or false information. For example, if one party agrees to buy a house from another party, both parties must sign a written agreement stating the terms of the sale. Without this agreement, either party could claim that they did not agree to the terms and demand something else. Alternatively, if the parties agree to a contract that involves a payment of $500 or more and do not sign a written agreement, the contract is not legally binding. The Statute of Frauds serves as an important protection for North Carolina citizens, providing assurance that parties cannot easily make false accusations against individuals or companies.

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What is the Statute of Frauds?

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