If you’ve ever been told, “Don’t worry, we shook hands on it,” you may be surprised to learn that under Texas law, many agreements are legally unenforceable unless they are in writing.
This rule is known as the Statute of Frauds, and it frequently becomes the deciding factor in contract, real estate, and business disputes.
Understanding how it works can save you from costly litigation—or help you win a case.
What Is the Texas Statute of Frauds?
The Texas Statute of Frauds is codified in Texas Business & Commerce Code § 26.01, which provides in part:
“A promise or agreement… is not enforceable unless the promise or agreement, or a memorandum of it, is in writing and signed by the person to be charged.”
Tex. Bus. & Com. Code § 26.01(a)
The statute then lists categories of agreements that must be in writing to be enforceable.
In simple terms:
Some contracts are legally worthless unless they are written and signed.
Contracts That Must Be in Writing in Texas
Under § 26.01(b), the following agreements generally require a written contract:
1. Real Estate Agreements
Any contract involving the sale or transfer of real property must be in writing:
“A contract for the sale of real estate”
§ 26.01(b)(4)
This includes:
- Purchase agreements
- Land sales
- Long-term leases
- Options to buy property
Handshake real estate deals rarely survive in court.
2. Agreements That Cannot Be Performed Within One Year
Texas law requires a writing for:
“An agreement which is not to be performed within one year”
§ 26.01(b)(6)
Example:
- A two-year employment contract
- A multi-year consulting agreement
- A long-term service arrangement
If the contract cannot possibly be completed within 12 months, it must be written.
3. Promises to Pay Someone Else’s Debt
Also covered are:
“A promise by one person to answer for the debt… of another person”
§ 26.01(b)(2)
This applies to:
- Personal guarantees
- Business loan guarantees
- Co-signer arrangements
If you promise to cover someone else’s debt, get it in writing.
4. Certain Business and Marriage-Related Agreements
The statute also applies to:
- Promises made in consideration of marriage
- Certain business commission agreements
- Some partnership and ownership arrangements
These often arise in divorce, probate, and business litigation.
What Counts as a “Writing” Under Texas Law?
Texas courts interpret “writing” broadly.
A valid writing may include:
- Formal contracts
- Emails
- Text messages
- Letters
- Signed proposals
- Multiple related documents
Under § 26.01(c):
“The writing may be contained in several writings that clearly relate to the same transaction.”
In modern cases, courts often enforce contracts based on email chains and digital signatures.
Does the Contract Have to Be Signed?
Yes.
The statute requires the agreement to be:
“signed by the person to be charged”
§ 26.01(a)
This means the person being sued must have signed it.
However, courts may accept:
- Typed names
- Electronic signatures
- Email signature blocks
- Digital acknowledgments
depending on the circumstances.
Exceptions: When an Oral Contract May Still Be Enforced
Even if a contract falls under the Statute of Frauds, Texas courts recognize limited exceptions.
1. Partial Performance (Real Estate)
In real estate cases, an oral agreement may be enforced if:
- The buyer paid consideration,
- Took possession, and
- Made improvements.
This doctrine is recognized under Texas case law and equitable principles.
2. Promissory Estoppel
Courts may enforce an oral agreement when:
- One party relied on the promise, and
- Suffered substantial harm.
This is known as promissory estoppel and is applied cautiously.
3. Admissions in Court
If a party admits under oath that a contract existed, courts may sometimes enforce it despite the statute.
Why the Statute of Frauds Matters in Real Life
In practice, the Statute of Frauds often determines whether a lawsuit succeeds or fails.
Common situations include:
❌ Unwritten Real Estate Deals
“I agreed to sell him the lot, but we never signed anything.”
Likely unenforceable.
❌ Verbal Employment Agreements
“They promised me three years of work.”
Probably barred.
❌ Oral Business Partnerships
“We agreed to split profits.”
Often problematic without documentation.
✅ Written Email Agreements
“We agreed by email and both signed.”
Likely enforceable.
How the Statute of Frauds Is Used in Litigation
In Texas lawsuits, defendants frequently raise the Statute of Frauds as an affirmative defense.
Under the Texas Rules of Civil Procedure, failure to plead it properly can waive the defense.
When properly raised, it may result in:
- Summary judgment
- Dismissal
- Defense verdict at trial
It is one of the most powerful technical defenses in contract litigation.
Practical Advice: How to Protect Yourself
For Individuals and Business Owners
- Put important agreements in writing
- Keep signed copies
- Save emails and texts
- Confirm key terms in writing
- Avoid “informal” deals involving real estate or long-term commitments
For Litigants
If you are suing or being sued over a contract, ask:
- Does this fall under § 26.01?
- Is there a signed writing?
- Are exceptions available?
- Can electronic records support enforcement?
These questions often determine case strategy.
When to Speak With a Texas Contract Attorney
You should consult counsel if:
- A major deal was never documented
- A business agreement is being disputed
- A real estate transaction fell apart
- A long-term promise was broken
- A lawsuit has been filed over an oral contract
Early analysis of the Statute of Frauds can prevent wasted litigation expenses.
Conclusion
The Texas Statute of Frauds exists to prevent fraud, confusion, and false claims—but it also invalidates many informal agreements that people believe are binding.
If a contract involves real estate, long-term performance, guarantees, or major financial obligations, get it in writing.
Otherwise, you may find yourself with no legal remedy at all.
At David C. Barsalou, Attorney at Law, PLLC, we help clients navigate business, family, tax, estate planning, and real estate matters ranging from document drafting to litigation with clarity and confidence. If you’d like guidance on your situation, schedule a consultation today. Call us at (713) 397-4678, email barsalou.law@gmail.com, or reach us through our Contact Page. We’re here to help you take the next step.