Why Must Some Deals Be in Writing? A Law Against Lying Witnesses

Seventeenth century trials were decided by juries who could rely on their own knowledge, the parties themselves were barred from giving evidence, and there was no effective penalty deterring a witness from lying. The result was that somebody could bring an action claiming an oral agreement that had never been made, produce witnesses willing to swear to it, and win. The legislation addressed that by requiring, for certain categories of agreement, that there be a written note signed by the party being sued, so that a claim could not rest on testimony alone. The title of the act describes its purpose exactly, which was preventing fraud and perjury.

The categories chosen have survived remarkably intact:

• •Contracts for the sale of land or any interest in it
• •Promises to answer for the debt of another person
• •Agreements that cannot be performed within a year
• •Promises made in consideration of marriage
• •Undertakings by an executor to pay an estate's debts personally
• •Sales of goods above a stated value, in later versions

The requirement is less demanding than people assume, since it asks for evidence of the agreement rather than for the agreement itself to be in writing. A note or memorandum identifying the parties, the subject matter and the essential terms, and signed by the party against whom enforcement is sought, has generally been enough. It need not be a single document, since several papers can be read together if they refer to each other. It need not have been created to record the contract, so a letter, a receipt or an internal memorandum can satisfy it. Courts have accepted a wide range of marks as signatures, and electronic communications now qualify under most modern legislation.

Courts were unwilling to let the rule be used as a shield by somebody who had actually made an agreement and then relied on the absence of writing, so they built an escape from it. Where one party has already done something substantial in reliance on the agreement, and where that act points unambiguously to the existence of a contract rather than being explicable otherwise, equity will enforce the deal despite the lack of a signed note. Taking possession of land and building on it is the classic example. The doctrine reintroduces exactly the oral evidence the rule excluded, which is either a necessary corrective or a substantial hole depending on the view taken.

The provision has been attacked almost since it passed, on the ground that it now causes more injustice than it prevents. The conditions that produced it are gone, since parties give evidence, perjury is prosecuted and documentary and electronic records are abundant. Meanwhile the rule lets somebody who genuinely made an agreement escape it on a technicality, which is fraud of a different kind. Courts responded by developing exceptions, most importantly where one party has already performed and would suffer serious loss, which reintroduces the oral evidence the rule was meant to exclude. England repealed most of the act in 1954, retaining the provisions on land and on guarantees, and other jurisdictions have narrowed it.

Juries relying on their own knowledge, parties barred from testifying and no effective penalty for perjury made invented oral agreements winnable, so an act of 1677 required signed written evidence for certain categories. It asks for a note recording the essential terms, not a formal contract, and several papers can be read together. England repealed most of it in 1954, keeping land and guarantees.