Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Tuesday, November 10, 2009

Statute of Frauds: Sale of Real Property, Real Estate Transactions

Statute of Frauds (Real Estate Sales Transaction) To be enforceable, a contract for the sale of real estate must comply with the statute of frauds. Tex. Bus. & Com. Code Ann. § 26.01(b)(4) (West 2009); Cohen v. McCutchin, 565 S.W.2d 230, 232 (Tex. 1978). Section 26.01 of the business and commerce code provides: (a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is (1) in writing; and (2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him. (b) Subsection (a) of this section applies to: . . . (4) a contract for the sale of real estate . . . . Tex. Bus. & Com. Code Ann. § 26.01. Whether a contract meets the requirements of the statute of frauds is a question of law. Bratcher v. Dozier, 346 S.W.2d 795, 796 (Tex. 1961); West Beach Marina, Ltd. v. Erdeljac, 94 S.W.3d 248, 264 (Tex. App.--Austin 2002, no pet.). [T]he statute of frauds bars a fraud claim to the extent that the plaintiff seeks to recover as damages the benefit of a bargain that cannot otherwise be enforced because it fails to comply with the statute of frauds. Haase v. Glazner, 62 S.W.3d 795, 799 (Tex. 2001). This is because "the Statute exists to prevent fraud and perjury in certain kinds of transactions by requiring agreements to be set out in a writing signed by the parties. But that purpose is frustrated and the Statute easily circumvented if a party can use a fraud claim essentially to enforce a contract the Statute makes unenforceable. The statute of frauds may not bar a common-law fraud claim to the extent the plaintiff seeks out-of-pocket damages incurred in relying upon the defendant's alleged misrepresentations because "[w]ith respect to such damages, [the plaintiff] is not attempting to enforce the otherwise unenforceable contract. . . . These kinds of damages are not part of the benefit of any alleged bargain between the parties." Haase v. Glazner, 62 S.W.3d 795, 799-800 (Tex. 2001). We need not address the type of damages Joseph seeks because statutory real estate fraud requires the existence of a contract. SOURCE: 03-07-00197-CV (Austin Court of Appeals (11/6/09) (Because there is no enforceable contract that satisfies the statute of frauds, the trial court did not err in granting appellees' motion for summary judgment.)