Statute of Frauds
The rule that contracts for the sale of real property must be in writing and signed to be enforceable.
In Texas the rule is Business and Commerce Code Section 26.01(a): an agreement listed in Section 26.01(b) is not enforceable unless it, or a memorandum of it, is in writing and signed by the person to be charged with the promise, or by someone lawfully authorized to sign for them. An oral agreement to sell land is generally not enforceable.
Two clauses matter for this exam. Section 26.01(b)(4) covers a contract for the sale of real estate. Section 26.01(b)(5) covers a lease of real estate for a term longer than one year, which means a lease of exactly one year or less falls outside the statute and may be oral.
This is why real estate purchase contracts and listing agreements are put in writing. A handshake deal for the sale of land usually fails under the Statute of Frauds. An electronic record and an electronic signature satisfy the requirement under Business and Commerce Code Sections 322.007(c) and 322.007(d).
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Contracts & Agency (13% of the exam)
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This definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.