Statute of Frauds

The Statute of Frauds exists to prevent fraud, perjury, and misunderstandings in high-value transactions. It mandates that any contract for the sale of real estate, or any lease lasting longer than one year, must be in writing.

Texas-Specific Nuance & Citation

In Texas, this is codified in the Texas Business & Commerce Code § 26.01. Any agreement for the sale of real property, or any lease of real property for a term longer than one year, is completely unenforceable in court unless it is in writing and signed by the party to be charged.

The Trap

Candidates often forget the exception. A verbal lease for a term of one year or less is fully valid and legally enforceable in Texas. It is only leases for more than one year, or actual sales contracts, that must strictly be in writing.

Worked Example

A landlord and tenant in El Paso agree verbally to a 9-month lease. This agreement is legally binding because it is under one year. However, if they verbally agree to a 2-year lease, the agreement violates the Statute of Frauds and cannot be enforced in a Texas court if either party backs out.