Statute of Frauds
When Must a Contract Be in Writing?
There are certain contracts that must be in writing, or have a written memorandum that records the essential elements of the agreement, in order to be enforced. The requirement that certain contracts be in writing is sometimes referred to as the Statute of Frauds.
Although several types of contracts fall under the Statute of Frauds, the following types of contracts, which typically come before a court of limited jurisdiction, must be in writing:
1. Agreements that cannot be performed within one year from the date of the contract formation, i.e. a two-year employment contract.
2. Contracts for the sale of goods exceeding $5000. NMSA §55-1-206.
In order to satisfy the Statute of Frauds, the written instrument or memorandum must contain all of the following elements:
1. The identity of the parties to the agreement.
2. Identification of the subject matter of the agreement.
3. The terms and conditions of the agreement.
4. Identification of the consideration.
5. The signature of the party who is being sued.