Does this agreement have to be in writing to be enforceable in Texas?
For the categories listed in § 26.01(b), yes: the promise or agreement, or a memorandum of it, is not enforceable unless it is in writing AND signed by the person to be charged, or by someone lawfully authorized to sign for them. The listed categories are: a promise by an executor or administrator to answer out of his own estate for a debt or damage due from the testator or intestate; a promise to answer for the debt, default or miscarriage of another person; an agreement made on consideration of marriage or of nonmarital conjugal cohabitation; a contract for the sale of real estate; a lease of real estate for a term longer than one year; an agreement which is not to be performed within one year from the date of making it; a promise to pay a commission for the sale or purchase of an oil or gas mining lease, an oil or gas royalty, minerals, or a mineral interest; and a warranty of cure relating to medical care made by a physician or health care provider.
The trap
The one-year category runs from the date the agreement is MADE, not from when performance starts or ends, so what matters is whether performance could be completed within one year of making: an agreement made today for work that cannot finish before this date next year is inside it, even if performance has not started. Two of the categories are easy to miss because they are not part of the classic common-law statute of frauds: the mineral-commission clause, and the physician's warranty of cure, which the section expressly does NOT apply to pharmacists. Note also what the statute requires is a signature by the party to be CHARGED, so a writing signed only by the party trying to enforce it does not satisfy the section. And § 26.01 is not the only Texas statute of frauds a commercial drafter meets: under § 26.02 a loan agreement with a financial institution in which the amount involved exceeds $50,000 is not enforceable unless in writing and signed by the party to be bound, and the parties' rights are then determined solely from the written agreement, with prior oral agreements merged into it: provided the lender gave the conspicuous notice § 26.02(e) prescribes, failing which the section does not apply to that loan. § 26.02(e) is prescriptive about that notice: it must be in a separate document signed by the debtor or obligor, or incorporated into one or more of the loan documents; it must be in type that is boldface, capitalized, underlined or otherwise set out from the surrounding written material so as to be conspicuous; and it must state substantially that the written loan agreement represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements, and that there are no unwritten oral agreements between them. § 26.02(d) adds that an agreement subject to (b) may not be varied by oral agreements or discussions before or contemporaneous with execution. Note also which lenders are in: 'financial institution' in § 26.02(a)(1) means a state or federally chartered bank, savings bank, savings and loan association or credit union, a holding company, subsidiary or affiliate of one, or a HUD-approved lender under the National Housing Act, so a loan from a private or non-bank lender over $50,000 is outside § 26.02, and so, even from a bank, is a credit card or charge card agreement, or an open-end account used primarily for personal, family or household purposes (§ 26.02(a)(2)); the prescribed notice in (e) closes over execution lines for the debtor or obligor and the financial institution and falls back on § 26.01's categories.
6 authorities
- statuteTex. Bus. & Com. Code § 26.01enacted 2005-09-01
The words that state the rule
(a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is (1) in writing; and (2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.
- statuteTex. Bus. & Com. Code § 26.01enacted 2005-09-01
The words that state the rule
(b) Subsection (a) of this section applies to: (1) a promise by an executor or administrator to answer out of his own estate for any debt or damage due from his testator or intestate; (2) a promise by one person to answer for the debt, default, or miscarriage of another person; (3) an agreement made on consideration of marriage or on consideration of nonmarital conjugal cohabitation; (4) a contract for the sale of real estate; (5) a lease of real estate for a term longer than one year; (6) an agreement which is not to be performed within one year from the date of making the agreement; (7) a promise or agreement to pay a commission for the sale or purchase of: (A) an oil or gas mining lease; (B) an oil or gas royalty; (C) minerals; or (D) a mineral interest; and (8) an agreement, promise, contract, or warranty of cure relating to medical care or results thereof made by a physician or health care provider as defined in Section 74.001 , Civil Practice and Remedies Code. This section shall not apply to pharmacists.
- statuteTex. Bus. & Com. Code § 26.02enacted 1999-09-01
The words that state the rule
(b) A loan agreement in which the amount involved in the loan agreement exceeds $50,000 in value is not enforceable unless the agreement is in writing and signed by the party to be bound or by that party's authorized representative. (c) The rights and obligations of the parties to an agreement subject to Subsection (b) of this section shall be determined solely from the written loan agreement, and any prior oral agreements between the parties are superseded by and merged into the loan agreement.
- statuteTex. Bus. & Com. Code § 26.02enacted 1999-09-01
The words that state the rule
(f) If the notice required by Subsection (e) of this section is not given on or before execution of the loan agreement or is not conspicuous, this section does not apply to the loan agreement, but the validity and enforceability of the loan agreement and the rights and obligations of the parties are not impaired or affected.
- statuteTex. Bus. & Com. Code § 26.02enacted 1999-09-01
The words that state the rule
(d) An agreement subject to Subsection (b) of this section may not be varied by any oral agreements or discussions that occur before or contemporaneously with the execution of the agreement. (e) In a loan agreement subject to Subsection (b) of this section, the financial institution shall give notice to the debtor or obligor of the provisions of Subsections (b) and (c) of this section. The notice must be in a separate document signed by the debtor or obligor or incorporated into one or more of the documents constituting the loan agreement. The notice must be in type that is boldface, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous. The notice must state substantially the following: "This written loan agreement represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. "There are no unwritten oral agreements between the parties. _________________ ______________________ "Debtor or Obligor Financial Institution"
- statuteTex. Bus. & Com. Code § 26.02enacted 1999-09-01
The words that state the rule
(a) In this section: (1) "Financial institution" means a state or federally chartered bank, savings bank, savings and loan association, or credit union, a holding company, subsidiary, or affiliate of such an institution, or a lender approved by the United States Secretary of Housing and Urban Development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. Section 1701 et seq.). (2) "Loan agreement" means one or more promises, promissory notes, agreements, undertakings, security agreements, deeds of trust or other documents, or commitments, or any combination of those actions or documents, pursuant to which a financial institution loans or delays repayment of or agrees to loan or delay repayment of money, goods, or another thing of value or to otherwise extend credit or make a financial accommodation. The term does not include a promise, promissory note, agreement, undertaking, document, or commitment relating to: (A) a credit card or charge card; or (B) an open-end account, as that term is defined by Section 301.002 , Finance Code, intended or used primarily for personal, family, or household use.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.