Does this contract need to be in writing to be enforceable in South Dakota?
Only if it falls on one of two overlapping lists. For contracts generally, SDCL 53-8-2 makes the following unenforceable by action "unless the contract or some memorandum thereof is in writing and subscribed by the party to be charged or his agent, as authorized in writing": (1) an agreement not to be performed within a year of its making; (2) an agreement made upon consideration of marriage, other than a mutual promise to marry; (3) an agreement for sale of real estate, or a lease of the same, for a period longer than one year; and (4) "an agreement for a loan of money or for an extension of credit," with no dollar threshold at all, though the agreement "may be enforced by a beneficiary for whom the agreement was made" and certain regulated loans are specifically exempt. For a sale of goods, SDCL 57A-2-201(1) independently requires a signed record wherever the price is $500 or more: "a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is a record sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the party's authorized agent or broker."
The trap
Section 53-8-2(4)'s loan-and-credit-extension clause has NO dollar floor: unlike Idaho's $50,000 threshold or North Dakota's $25,000 aggregate-loan threshold for their general statutes of frauds, South Dakota's text reaches an oral loan or credit extension of any size, subject only to the specific carve-out for loans under SDCL 51A-12-12 or chapter 54-11. A drafter importing a form from a state whose general statute of frauds stops at the classic categories (year, marriage, real property) will miss this. Separately, SDCL 57A-2-201 has its own real escape hatches a drafter relying on the general rule can overlook: subsection (2) lets a merchant's unanswered written confirmation bind the recipient within ten days, and subsection (3) makes the contract enforceable without any writing for specially manufactured goods once the seller has begun manufacture, for a quantity admitted in pleadings or testimony, or for goods actually paid for and accepted, and subsection (3)(d) supplies South Dakota-specific rules for grain, grain sorghums, beans, pulse crops, and oil seeds that have no counterpart in most other states' UCC text.
7 authorities
- statuteSDCL § 53-8-2enactment date not established
The words that state the rule
The following contracts are not enforceable by action unless the contract or some memorandum thereof is in writing and subscribed by the party to be charged or his agent, as authorized in writing:
- statuteSDCL § 53-8-2enactment date not established
The words that state the rule
(1) An agreement that by its terms is not to be performed within a year from the making thereof; (2) An agreement made upon consideration of marriage, other than a mutual promise to marry; (3) An agreement for sale of real estate or an interest therein, or lease of the same, for a period longer than one year. However, this does not abridge the power of any court to compel specific performance of any agreement for sale of real estate in case of part performance thereof; and
- statuteSDCL § 53-8-2enactment date not established
The words that state the rule
An agreement for a loan of money or for an extension of credit, which agreement may be enforced by a beneficiary for whom the agreement was made, including, but not limited to, vendors of agricultural goods, services or products. A loan or an extension of credit made pursuant to § 51A-12-12 or chapter 54-11 is specifically exempt from the provisions of this section.
- statuteSDCL § 57A-2-201enactment date not established
The words that state the rule
Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is a record sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the party's authorized agent or broker.
- statuteSDCL § 57A-2-201enactment date not established
The words that state the rule
(2) Between merchants if within a reasonable time a record in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against the party unless notice in a record of objection to its contents is given within ten days after it is received.
- statuteSDCL § 57A-2-201enactment date not established
The words that state the rule
(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable: (a) If the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or (b) If the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or (c) With respect to goods for which payment has been made and accepted or which have been received and accepted (§ 57A-2-606 ); or
- statuteSDCL § 57A-2-201enactment date not established
The words that state the rule
(d) With respect to the sale of grain, grain sorghums, beans, pulse crops, and oil seeds: (i) If the party seeking enforcement of the contract has a recorded statement of the contract terms with the party against whom enforcement is sought or a noncontract party's verbal or written verification of the contract terms confirmed by the party against whom enforcement is sought; or (ii) If the party seeking enforcement of the contract has a written agreement by the party against whom enforcement is sought providing for the enforcement of verbal contracts; or (iii) If within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving the writing in confirmation has reason to know its contents, the writing in confirmation satisfies the requirements of subsection (1) of this section against such party unless written notice of objection to its contents is given within two days after the writing in confirmation is received.