Statute of Frauds

A buyer or seller meets this rule when a handshake or an email thread is all that records a promise. It reaches only the kinds of promise the statute lists, such as land, leases and guarantees. See whether a handshake deal before the LOI is worth anything. This entry covers Ontario and British Columbia; check the rules where you are.

Ontario

Section 4 of Ontario’s Statute of Frauds says no action is to be brought on those promises unless the agreement, or some memorandum or note of it, is in writing and signed by the party to be charged or a person lawfully authorized by that party. Section 1(2) says leases are void unless made by deed, subject to the exception in section 3 for certain short leases.

British Columbia

The Law and Equity Act has a section headed “Enforceability of contracts”. It says a contract respecting land is not enforceable unless there is a signed writing showing the contract was made and its subject matter, or the party to be charged did or acquiesced in an act indicating it was made, or the person alleging it so changed position in reasonable reliance on it that only enforcing it can avoid an inequitable result. A guarantee or indemnity needs signed writing or such an act. The section has exceptions, including certain short leases and guarantees arising by operation of law or imposed by statute.