Evidence Generally

ORS 41.580
Statute of frauds


(1)

In the following cases the agreement is void unless it, or some note or memorandum thereof, expressing the consideration, is in writing and subscribed by the party to be charged, or by the lawfully authorized agent of the party; evidence, therefore, of the agreement shall not be received other than the writing, or secondary evidence of its contents in the cases prescribed by law:

(a)

An agreement that by its terms is not to be performed within a year from the making.

(b)

An agreement to answer for the debt, default or miscarriage of another.

(c)

An agreement by an executor or administrator to pay the debts of the testator or intestate out of the estate of the executor or administrator.

(d)

An agreement made upon consideration of marriage, other than a mutual promise to marry.

(e)

An agreement for the leasing for a longer period than one year, or for the sale of real property, or of any interest therein.

(f)

An agreement concerning real property made by an agent of the party sought to be charged unless the authority of the agent is in writing.

(g)

An agreement authorizing or employing an agent or broker to sell or purchase real estate for a compensation or commission; but if the note or memorandum of the agreement is in writing and subscribed by the party to be charged, or by the lawfully authorized agent of the party, and contains a description of the property sufficient for identification, and authorizes or employs the agent or broker to sell the property, and expresses with reasonable certainty the amount of the commission or compensation to be paid, the agreement shall not be void for failure to state a consideration.

(h)

An agreement, promise or commitment to lend money, to otherwise extend credit, to forbear with respect to the repayment of any debt payable in money, to modify or amend the terms under which the person has lent money or otherwise extended credit, to release any guarantor or cosigner or to make any other financial accommodation pertaining to an existing debt or other extension of credit. This paragraph does not apply:

(A)

If no party to the agreement, promise or commitment is a financial institution as defined in ORS 706.008 (Additional definitions for Bank Act), a consumer finance company licensed under ORS chapter 725 or a mortgage banker as defined in ORS 86A.100 (Definitions); or

(B)

To a loan of money or extension of credit to a natural person which is primarily for personal, family or household purposes and not for business or agricultural purposes or which is secured solely by residential property consisting of one to four dwelling units, one of which is the primary residence of the debtor.

(2)

(a) Except as provided in this subsection, defenses and exceptions created by provisions of the Oregon Revised Statutes or recognized by the courts of this state do not apply to subsection (1)(h) of this section.

(b)

An agreement, promise or commitment which does not satisfy the requirements of subsection (1)(h) of this section, but which is valid in other respects, is enforceable if the party against whom enforcement is sought admits in the party’s pleading, testimony or otherwise in court that the agreement, promise or commitment was made. The agreement is not enforceable under this paragraph beyond the dollar amount admitted.

(c)

Nothing in subsection (1)(h) of this section precludes a party from seeking to prove the modification of any term relating to the time of repayment.

(3)

(a) If a financial institution as defined in ORS 706.008 (Additional definitions for Bank Act), a consumer finance company licensed under ORS chapter 725 or a mortgage banker as defined in ORS 86A.100 (Definitions) lends money or extends credit, and subsection (1)(h) of this section applies to the loan or extension of credit, the financial institution, consumer finance company or mortgage banker shall, not later than the time the loan or extension of credit is initially made, include within the loan or credit document, or within a separate document which identifies the loan or extension of credit, a statement which is underlined or in at least 10-point bold type and which is substantially to the following effect:

Under Oregon law, most agreements, promises and commitments made by us concerning loans and other credit extensions which are not for personal, family or household purposes or secured solely by the borrower’s residence must be in writing, express consideration and be signed by us to be enforceable.

(b)

The financial institution, consumer finance company or mortgage banker shall obtain the borrower’s signature on the original document described in paragraph (a) of this subsection and shall give the borrower a copy. [Amended by 1989 c.967 §§1,19; 1993 c.508 §39; 1997 c.631 §373; 2003 c.386 §1]

Notes of Decisions

In General

"Void"

Contract that by its own terms is capable of performance within one year is outside Statute of Frauds and no writing is required. Sun Studs, Inc. v. Applied Theory Associates, Inc., 772 F2d 1557 (1985)

Statute of frauds does not require "delivery" of writing. D'Angelo v. Schultz, 306 Or 504, 760 P2d 866 (1988)

"Subscribed"

Unsigned agreement outline arriving in same envelope as cover letter which did not by reference incorporate agreement and signed by patent attorney of party did not satisfy subscription requirement of this section. Sun Studs, Inc. v. Applied Theory Associates, Inc., 772 F2d 1557 (1985)

Waiver of defense

Where, in trial court, no demurrer has been filed nor objection raised that contract is void and unenforceable under Statute of Frauds, this contention cannot be raised for first time on appeal. Southworth v. Oliver, 284 Or 361, 587 P2d 994 (1978)

In suit by optionees to obtain specific performance of written option to purchase real property, where optionees alleged that optionor orally agreed to extend time for exercise of option, complaint raised issue of whether landowner waived contract provision and was estopped to later retract waiver and rely on strict terms of contract. Davidson v. Wyatt, 289 Or 47, 609 P2d 1298 (1980)

Void Agreements

Scope

An oral agreement purporting to create rights of survivorship in real property is within the statute. Bridgman v. Stout, 10 Or App 474, 500 P2d 731 (1972)

Fiduciary relationship may exist between seller and broker prior to written agreement authorizing or employing broker. Starkweather v. Shaffer, 262 Or 198, 497 P2d 358 (1972)

If a contract, otherwise to continue for more than a year, is by its own terms subject to termination within a year, it is not within the prohibition. Frontier Ins. Agency, Inc. v. Hartford Fire Ins. Co., 262 Or 470, 499 P2d 1302 (1972)

An interest in a limited partnership may be created by parole despite the fact that the limited partnership had interests in real property. Pyle v. Wolf Corp., 354 F Supp 346 (1972)

When vendee sues for money had and received, seeking to recover payment made pursuant to an agreement within this section, vendor is entitled to prove that vendee's breach of the oral agreement harmed vendor. Golden v. Golden, 273 Or 506, 541 P2d 1397 (1975)

When the promise to pay the debt of another is relied upon and the reliance is sought to subserve the business purposes of the promisor, the promise does not come within the purview of this section. Meader v. Orbit Inn Corp., 276 Or 921, 556 P2d 1365 (1976)

The purchase, development and sale of an apartment project could properly be shown by parol evidence as being within the scope of a partnership agreement. Harestad v. Weitzel, 272 Or 199, 536 P2d 522 (1977)

A contract which contained provision allowing either party to terminate 90 days after plaintiff began performance was not within this section. Thompson v. Industrial Lumber Co., 41 Or App 519, 599 P2d 468 (1979), Sup Ct review denied

Vendor's statements that vendees should not settle suit to quiet title to easement were admissible since that part of agreement, if any, did not involve transfer of real property, but rather authority to settle law suit. Marshall v. Wattles, 67 Or App 442, 678 P2d 762 (1984)

Where there was ample evidence to support finding that defendant's main purpose in guaranteeing Wind Surfing's debt was his own substantial, personal, immediate and pecuniary interest in receiving money he had loaned Wind Surfing as general creditor, trial court was correct in holding that main purpose exception to Statute of Frauds was applicable. White Stag v. Wind Surfing, Inc., 67 Or App 459, 679 P2d 312 (1984)

Where issue of fact exists as to whether written premarital agreement was destroyed by defendant, defendant may not invoke this section to protect fraud. Baker v. Mohr, 111 Or App 592, 826 P2d 111 (1992)

Estoppel

Allegation that plaintiff gave up prior position in order to take employment for term in excess of one year with defendant was sufficient to state cause of action on oral agreement which was otherwise within statute and was sufficient to defeat defendant's demurrer. Stevens v. Good Samaritan Hosp., 264 Or 200, 504 P2d 749 (1972)

Reliance by promisee, to his detriment, on oral agreement may cause promisor to be estopped from asserting statute of frauds. Stevens v. Good Samaritan Hosp., 264 Or 200, 504 P2d 749 (1972)

Under evidence that consultant, in reliance on oral promise, spent two years securing supplies for woodchip purchaser, purchaser was estopped from asserting Statute of Frauds with respect to consultant's action for unpaid commissions and anticipatory breach of contract. Gray v. Mitsui and Co., Inc., 434 F Supp 1071 (1977)

In action at law, party may be estopped, in appropriate circumstances, from asserting Statute of Frauds. Siegner v. Interstate Production Credit Assn., 109 Or App 417, 820 P2d 20 (1991)

No agreement was formed where county staff expressed encouragement for project but applicant knew negotiations could not ripen into enforceable agreement without commissioners' approval of permit. J.J. & L. Properties, Inc. v. Henry, 122 Or App 395, 858 P2d 161 (1993), Sup Ct review denied

Expression of consideration

Viewed as a whole, the written earnest money agreement for the sale of corporate stock and mortgaged realty clearly indicated that the value of the land conveyed served as consideration for the assumption of the mortgage, so that the letter between the parties did not violate this section. U.S. v. Pollard, 524 F2d 808 (1975)

Leases

An oral agreement to pay rentals to the lessor for life and then to the defendant, purporting only to shift the payment of rent from the lessor to a third person, did not conflict with the objectives of this section and was therefore valid. Watters v. Watters, 270 Or 673, 528 P2d 1347 (1974)

Membership agreements granting hunting and fishing rights in property were enforceable where description of property, in light of extrinsic evidence, applied with reasonable certainty to single, identifiable piece of property. High v. Davis, 283 Or 315, 584 P2d 725 (1978)

This section is not applicable to an agreement to provide a lease. Ralston v. Spoor, 39 Or App 883, 593 P2d 1285 (1979), Sup Ct review denied

Where defendant's agent in leasing space for mobile home to plaintiff on month-to-month basis, promised orally to secure county approval for permanent location of mobile home in space, contract did not create interest in real property and was not subject to statute of frauds. Abraham v. Kendall, 69 Or App 341, 686 P2d 428 (1984)

Statute of frauds did not bar plaintiff's claim for breach of contract, despite failure to specify location of subject lands where arguably invalid provision of contract had been fully performed. Willamette Quarries v. Wodtli, 308 Or 406, 781 P2d 1196 (1989)

Note or memorandum

Written agreement for broker to sell real estate must contain description of property, authorization to sell and amount of broker's commission, but need not contain a term such as seller agreeing to repair sidewalk. Ward Cook, Inc. v. B-OK, Inc., 261 Or 227, 493 P2d 136 (1972)

Letter from defendant's predecessor in title to plaintiff which sought permission to allow cars from plaintiff's property to pass on to property of predecessor for benefit of predecessor, in consideration of which predecessor would do certain things for plaintiffs which did not include granting of easement or servitude over defendant's property for benefit of plaintiff's property was not sufficient memorandum to charge defendant's property with easement or servitude. Corey v. United Savings Bank, 52 Or App 263, 628 P2d 739 (1981), Sup Ct review denied

Statute of frauds does not require "delivery" of writing. D'Angelo v. Schultz, 306 Or 504, 760 P2d 866 (1988)

Agreements concerning real property

Specific performance of real property sales contract was properly denied where board of trustees' attorney, who negotiated contract which board later rejected, did not have written authority to accept offer. Coleman v. Parry Center, 43 Or App 775, 604 P2d 424 (1979), Sup Ct review denied

Where lease is required to be in writing, subsequent oral modification of lease terms is ineffective. Washington Square, Inc. v. First Lady Beauty Salons, 290 Or 753, 625 P2d 1311 (1981)

Grantors' conveyance of easement pursuant to oral contract takes contract out of the statute and therefore this section does not bar grantors from proving oral promise made by grantee's agent to induce grantors' promise to convey although agent had no written authority to make the promise. Wiggins v. Barrett & Associates, 295 Or 679, 669 P2d 1132 (1983)

Absence of writing is defense to enforcment of contract, not challenge to existence of contract and, generally, neither offer nor acceptance need be in writing to make contract, even for sale of real property. D'Angelo v. Schultz, 110 Or App 445, 823 P2d 997 (1992)

Requirement for written authorization applies to employee of municipal corporation. Capital Development Co. v. Port of Astoria, 109 F3d 516 (9th Cir. 1997)

Where partial performance has occurred in oral contract involving mutual exchange of interests in real property, only equitable remedies are available against nonperforming party. Parthenon Construction and Design, Inc. v. Neuman, 166 Or App 172, 999 P2d 1169 (2000)

Where services agreement required purchase of land from third party and arrangement for transfer of deed from third party to party other than purchaser, services agreement was agreement for sale of real property. Outback Contracting, Inc. v. Stone Southwest, Inc., 167 Or App 98, 1 P3d 469 (2000), Sup Ct review denied

Oral acceptance, modification or abandonment

Oral modification which eliminated certain property from sale was not within statute of frauds. Norris, Beggs & Simpson v. Eastgate Theatres, Inc., 261 Or 56, 491 P2d 1018 (1971)

Oral modification of written contract is not ineffective unless modification resulted in new agreement which would itself be within statute of frauds. Norris, Beggs & Simpson v. Eastgate Theatres, Inc., 261 Or 56, 491 P2d 1018 (1971)

Terms of brokerage agreement not required by the statute of frauds to be in writing may be orally modified. Sipe v. Pearson, 276 Or 715, 556 P2d 654 (1976)

Oral agreement that broker will pay commission to salesman who is agent of broker is void if broker purchases the property in his or her individual capacity. Ehler v. Peck, 286 Or 523, 595 P2d 1245 (1979)

Part performance

Like Parol Evidence Rule, Statute of Frauds is seldom applied according to its literal terms and contract void under literal reading of statute is rendered enforceable in equity if party seeking to avoid statute has partially performed oral contract. Siegner v. Interstate Production Credit Assn., 109 Or App 417, 820 P2d 20 (1991)

Before partially performed oral contract will be enforced in full, court must find there are equitable grounds for enforcement. Martin v. Allbritton, 124 Or App 345, 862 P2d 569 (1993); Oltmanns v. Lewis, 135 Or App 35, 898 P2d 772 (1995)

Taking possession of real property and making valuable improvements either in reliance on oral promise or following parol gift is sufficient part performance to place agreement outside Statute of Frauds. Conradi v. Perkins, 149 Or App 149, 941 P2d 1083 (1997), Sup Ct review denied

Where cotenant claims that possession of jointly owned land is evidence of partial performance of oral contract for transfer of land, there must be change in relationship between parties that would draw observer's attention and indicate contract had been made. Aylett v. Aylett, 185 Or App 563, 60 P3d 1114 (2003)

Law Review Citations

28 WLR 223 (1992)


Source

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Jun. 26, 2021