Contract law stipulates that some agreements must be formalized and recorded in writing. This requirement is referred to as the statute of frauds. This statute exists since it is difficult to uphold certain kinds of oral contracts in a court of law. The statute of frauds determines under what circumstances should a contract be written and under which situations can a contract become void.
The following instances require a written contract: contracts involving marriage, contracts that cannot be fulfilled within a year, contracts that involve transfer of land or an interest of land, contracts made by an executor of a will to disburse payments out of his or her own money, contracts involving the sale of goods or services above a fixed value depending on the jurisdiction, and contracts that involve a party as a guarantor for another’s debt or obligation.
As the literal name statute of frauds implies, the statute was enforced to prevent any party from being a victim of fraudulence. The statute does not just require that the contracts that fall under the circumstances mentioned previously be written but that certain elements of the contract must be formalized. Such elements include the names of all the parties involved in the transaction as well as the promise made by each party and the conditions provided for the fulfillment of such promises. It is also necessary that all the parties involved must sign the contract to express their agreement over the purpose of the contract and the conditions stipulated therein that must be fulfilled.