Florida Statute of Frauds – Case Law Update

The Florida Statute of Frauds is codified at Florida Statute section 725.01 which provides, in pertinent part:

No action shall be brought … whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person … or upon any agreement that is not to be performed within the space of 1 year from the making thereof … unless the agreement or promise upon which such action shall be brought, or some note or memorandum thereof shall be in writing and signed by the party to be charged therewith….

As it relates to the time for performance, the general rule is that an oral contract for an indefinite time is not necessarily time barred by the Statute of Frauds; only if a contract could not possibly be performed within one year would it fall within the statute. 

Relying upon this rule, the court in Terzis v. Pompano Paint and Body Repair, Inc., 4D11-2155, 2012 WL 6601316 (Fla. 4th DCA 2012), ruled that where the complaint did not allege that the parties agreed on a time for performance of the oral contract or that the parties intended that it should be for longer than a period of one year, the oral contract fell outside the purview of the statute of frauds.  The court noted that since the case was at a motion to dismiss stage, that the reasonable inferences arising from the complaint suggested that the oral contract was for an indefinite time and could be performed within a year. 

Contract litigation is replete with a variety of issues whether you are seeking to enforce a contract, or defending against enforcement of it.  The attorneys at Schecter Law have the knowledge and experience to tackle complex contractual disputes and can assist you or your business with all of your business contract litigation needs.

Real estate brokerage agreements should be written and signed by all parties, even though a written agreement is not required by Florida law.  Written agreements enable consistent construction and better protect the rights of the parties.

Generally, contracts may be either written or verbal. Florida, like every jurisdiction in the United States, has laws requiring that certain types of contracts be made in writing.  The purpose in requiring written agreements is to prevent fraud.  Therefore, the laws requiring writing are called “statutes of frauds.”  As the Florida Supreme Court explained in Yates v. Ball, 181 So. 341, 344 (Fla. 1937), “The statute of frauds grew out of a purpose to intercept the frequency and success of actions based on nothing more than loose verbal statements or mere innuendos.”

Florida law requires written agreements for the sale or real property and for the long-term lease of real property.  Florida law does not require real estate brokerage agreements to be written agreements.  Real estate brokerage agreements, including agreements with listing and commission clauses, have the transfer of real property as their likely conclusion.  Further, these agreements tend to control some of the terms for the transfer of real property.  Due to their significance and their relation to agreements that are required to be written, real estate brokerage agreements should be made in writing.

The statute of frauds sets a floor for memorializing the terms of agreements, not a ceiling.  It is generally the better practice to reduce all terms of an agreement to writing, regardless of whether writing is required by the statute of frauds.  Real estate brokerage agreements should be written and signed by all parties, particularly because these agreements can have significant repercussions pertaining to the transfer of the property in question.

If you are about to enter into a real estate brokerage agreement or have an oral real estate brokerage agreement that should be in writing, call one of our South Florida real estate lawyers today at (954) 779-7009.