Contract Law: The Statute of Frauds

Douglas Wilhelm Harder, M.Math. LELDepartment of Electrical and Computer Engineering

University of Waterloo

Waterloo, Ontario, Canada

ece.uwaterloo.ca

dwharder@alumni.uwaterloo.ca

© 2013 by Douglas Wilhelm Harder. Some rights reserved.

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Outline

An introduction to the engineering profession, including:– Standards and safety– Law: Charter of Rights and Freedoms, contracts, torts, negligent

malpractice, forms of carrying on business– Intellectual property (patents, trade marks, copyrights and

industrial designs)– Professional practice

• Professional Engineers Act• Professional misconduct and sexual harassment

– Alternative dispute resolution– Labour Relations and Employment Law– Environmental Law

Statute of Frauds

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Written Contracts

It is a matter of precedence that contracts may be either written or verbal, they may be entered into entirely through only discussions or only correspondence– This is again, a matter of judicial precedence

As discussed previously, at times, the legislature can pass laws that normalize precedence or entirely replace precedence– Once such statutes are passed, courts must abide by those

statutes

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Written Contracts

In 1677, the English Parliament determined that there were certain contracts that had to be written to prevent fraud

An Act for Prevention of Frauds and Perjuries

The purpose of such acts is to prevent fraudulent transfer of lands based on false testemony

The equivalent today in Ontario is the Statute of Frauds– It’s quite short, being no more than two pages

Statute of Frauds

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Statute of Frauds

The statute requires that any contracts the involve certain dealings must be written

Writing required for certain contracts

4. No action shall be brought to charge any executor or administrator upon any special promise to answer damages out of the executor’s or administrator’s own estate, or to charge any person upon any special promise to answer for the debt, default or miscarriage of any other person, or to charge any person upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party. 

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Real Property

In any matters concerning real property, it is necessary that you obtain legal advice

Statute of Frauds

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Questions of Taking on Debt

There are two mechanisms for taking on another person’s debt:– Guarantees and indemnities

An indemnity is paying, by way of compensation, a loss suffered by another

A guarantee is a promise by a third party to honour the obligations of a contract should the obligor breach that obligation

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Questions of Taking on Debt

A guarantee must be in written– If a minor enters into a contract with, for example, a cellular

phone service provider, the provider will require that a person (usually a parent) guarantees the debt

Promises of indemnity need not be in writing can be legally enforceable

Statute of Frauds

9Void versus Unenforceable Contracts

Note that this is entirely a matter of a contract being enforceable– If John and Jane enter into a verbal contract to transfer land

from John to Jane and the appropriate transactions are made, the sale of the land is legal

– It is only if part way through that John makes an objection that Jane has no legal recourse to enforce the agreement through the courts

Statute of Frauds

10Void versus Unenforceable Contracts

Never-the-less, courts do not consider such agreements void– A void contract is one that has never been a legally enforceable

contract—no terms in the contract may be enforced through court action

– A voidable contract is a contract where one of the parties has the option of declaring the contract void

For example, if part of a verbal agreement for the transfer of lands included the deposit of a cheque, the depositor can apply to a court to have the cheque returned

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Written Contracts

While most contracts may not be required to be in writing, it is never-the-less of significant benefit to both parties to have any substantial contract in writing

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References

[1] D.L. Marston, Law for Professional Engineers, 4th Ed., McGraw Hill, 2008.

[2] Julie Vale, ECE 290 Course Notes, 2011.

[3] Wikipedia, http://www.wikipedia.org/

[4] Statute of Frauds, 1990http://www.e-laws.gov.on.ca/html/statutes/english/

elaws_statutes_90s19_e.htm

These course slides are provided for the ECE 290 class. The material in it reflects Douglas Harder’s best judgment in light of the information available to him at the time of preparation. Any reliance on these course slides by any party for any other purpose are the responsibility of such parties. Douglas W. Harder accepts no responsibility for damages, if any, suffered by any party as a result of decisions made or actions based on these course slides for any other purpose than that for which it was intended.

Statute of Frauds