If your business contract includes any of the above, it must be in writing. However, it is always a good idea to have written contracts, regardless of the purpose of the contract. The Fraud Act applies to a contract for the sale of real estate and leases with a term of more than one year. [20] In Texas, many real estate contracts differ when it comes to oil, gas, and mining contracts. However, Texas courts have ruled that scam law is not only affected because a real estate transaction may be involved. [21] The Fraud Act prevents the application of certain oral agreements. The law generally refers to contracts that last more than one year in the professional sense. Contact our office immediately to determine if your employment contract violates the Fraud Act. Agreements that require indefinite performance and are not dependent on the conditions of their continuation generally do not require drafting under the Fraud Act, since “the agreement itself contains nothing to demonstrate that [the agreement] could not be completed within one year depending on its duration and the agreement of the parties .”” [14] Agreements that hold the life of one of the parties would also not require written writing, since the party whose lifespan measures the duration of the contract could die within one year of entering into the agreement. [15] The Fraud Act is a common law principle that states that certain agreements must be in writing to be legally binding. The law covers land sales and certain other transactions identified by their dollar amount. There are a few important exceptions, contact our office to determine if you are in violation of the Fraud Act.
Agreements requiring performance over a specified period of time or for a specified period of time can easily be determined by the court as falling under article 26.01(b)(6) or not. [11] Texas courts have generally held that if the execution date is not specified or cannot be easily determined, fraud law does not apply if enforcement could potentially be completed within one year of entering into the agreement. [12] Agreements whose time of performance is not expressly indicated – but which can be easily identified from the context of the agreement – can also easily be determined as being within or outside article 26.01(b)(6). [13] In Texas, the Fraud Act is listed in Chapter 26 of the Texas Business and Commerce Code. Article 26.01 (b) applies the law to contracts concerning: marriage (“or against the consideration of an illegitimate cohabitation”), security, contracts that cannot be performed within one year from the date of conclusion of the contract, promises by an executor or administrator to be liable for his own estate for debts or damages owed by his testator or his estate, certain medical contracts and sales of real estate or leases of real estate for a period of more than one year[7] and certain payments related to mining participations. Since LandTrusts are occasionally found in real estate investments, it should be noted that there is a fraud law that relates to trusts found in section 112.004 of the Real Estate Code: “A trust in real estate or personal property is enforceable only if there is written proof of the terms of the trust bearing the signature of the trustee or the trustee`s authorized representative.” Therefore, the usual (but negligent) practice of identifying a trust as a stock exchange in an act, without an underlying written trust agreement, is legally inadequate. In Texas, the Fraud Act requires that the following agreements be in writing or be unenforceable in court: “Under this exception, contracts that have been partially fulfilled but do not meet the requirements of the Fraud Act may be enforced in equity if the denial of performance would amount to virtual fraud in the sense that the party relying on the contract: suffered a significant disadvantage. for which he does not have a reasonable remedy and the other party, if allowed to invoke the law, would reap an undeserved advantage. »)). . . .