California Civil Code Section 1624, commonly referred to as the Statute of Frauds, provides that certain “contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or the party’s agent….” The statute then goes on to describe seven types of contracts which are invalid under its provisions. The statute, however, is conspicuously silent on the meaning of the phrase “some note or memorandum thereof, are in writing….” So just what does the Statute of Frauds require be “in writing”? Additionally, California Commercial Code Section 2201 (California’s version of the Uniform Commercial Code) provides, in pertinent part: “[e]xcept as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars ($500) or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his or her authorized agent or broker.”

The key to understanding what type of writing is really contained in the statute itself—sentence doesn’t make sense. Note the phrase “or some note or memorandum thereof….”

The type of writing that will satisfy the Statute of Frauds really depends upon the type of transaction the parties’ agreement relates to. Some types of “writings” that have been held sufficient are: a letter; a telegram or telex; a receipt; an invoice; a check; a penciled price list; or the minutes of a meeting. See Contracts, Section 6.7, pages 426-427 (2^nd Ed. Little, Brown and Company 1990).

In most circumstances all that is required is that the “essential terms” of the agreement be in writing and no “magic” words are required. California Civil Code Section 1550provides a description of the “essential terms” of a contract and provides: “[i]t is essential to the existence of a contract that there should be: ¶ 1. Parties capable of contracting; ¶ 2. Their consent; ¶ 3. A lawful object; and, ¶ 4. A sufficient cause or consideration. The more complex the transaction between the parties, the more complex the writing will need to be. See also, California Civil Jury Instructions (CACI), Instruction 302. Contract Formation – Essential Factual Elements. For example, in the context of a sale of goods valued at more than $500 under Section 2201, the writing may consist of a napkin upon which the parties names, goods to be sold, and their price are scribbled which has been signed by the parties. On the other hand, a complex real estate transaction may require scores of pages containing not only the essential terms of the agreement, but a definition of words used in the agreement, as well as numerous other provisions which may or may not be “essential,” but which are nonetheless very important to understanding the agreement.

To ensure your agreement will be enforceable in California, you will need the services of a rising star like Michael Leonard, Esq., named “Best of the Bar” by the San Diego Business Journal in 2016. You can arrange for a consultation with Mr. Leonard to discuss creating   agreements for your business or  other business-related matters by visiting San Diego Corporate Law or by telephone at (858) 483-9200. He has the experience, knowledge, and unique qualifications to ensure all of your agreements are enforceable in the California Courts.