statute of frauds
In general, a conveyance, agreement or declaration regarding real property cannot be enforced under Utah law if it was done orally. These agreements are governed by what is called “the statute of frauds” and must be contained in some type of writing to be enforced.
The statute of frauds in Utah says that interests in real property can only be created or granted by deed or other conveyance in writing signed by the grantor, or by operation of law. (This doesn't apply to leases less than one year.) Utah Code § 25-5-1. The law further says that every contract for the sale of any land or any interest in land is void unless the contract (or a note or memorandum to the contract) is in writing and signed by the seller. Utah Code § 25-5-3. Therefore, easements, covenants, servitudes and other restrictions that apply to real property must be in writing and signed by the person granting or declaring the interest or restriction.
But, there are exceptions. A court may uphold an oral agreement when one party has partly performed their obligations under the contract in reliance on the contract. Utah Code § 25-5-8. The standard for sufficient partial performance in Utah is:
- the oral contract and its terms must be clear and definite;
- the acts done in performance of the contract must be equally clear and definite; and
- the acts must be in reliance on the contract. Such acts in reliance must be such that (a) they would not have been performed had the contract not existed, and (b) the failure to perform on the part of the promisor would result in fraud on the performer who relied, since damages would be inadequate. Reliance may be made in innumerable ways, all of which could refer exclusively to the contract.
Spears v. Warr, 2002 UT 24 at ¶ 24, 44 P.3d 742 (Utah, 2002).
Evidence of partial performance must be “strong,” with a preference for “acts-oriented rather than word-oriented” evidence See id. The acts of part performance must be exclusively attributable to the contract in that the acts must be reasonably explainable only by the presumption that a contract exists. See id.
The applicability of the statute of frauds is a question of law. Spears v. Warr, 2002 UT 24 at ¶ 23, 44 P.3d 742 (Utah, 2002).
Utah Code § 70A-2-201(3)(b) says that a contract that doesn't satisfy the requirements of the statute of frauds may still be upheld "if the party against whom enforcement is sought admits in a pleading, testimony or otherwise in court that a contract for sale was made." While this statute only applies to the sale of goods and not real property, it's possible that it would extend to real property based on the purpose of the statute, which is to prevent fraud and the fact that it "simply recognizes the obvious, that if [a party] acknowledges a valid and binding contract, he should be bound thereby." Lish v. Compton, 547 P. 2d 223 (Utah 1976). See also, "The statute of frauds is a defense that can be waived by a failure to plead it as an affirmative defense, admitting the agreement's existence in the pleadings, or admitting at trial the existence and all essential terms of the contract." Bentley v. Potter, 694 P. 2d 617 (Utah 1984).
