The Statute of Frauds in Tennessee: When Contracts Must Be in Writing

Tennessee law requires certain contracts to be in writing to be enforceable. This rule, known as the Statute of Frauds, protects all parties by reducing the risk of fraud and misunderstandings. Knowing when you need a written contract is essential to ensure your agreements hold up in court.

Real Estate Contracts

Tennessee mandates that all contracts for the sale or purchase of real estate must be in writing. Under § 29-2-101(a), the statute states:
“Upon any contract for the sale of lands, the promise or agreement, upon which action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person lawfully authorized by such party.”

This requirement covers all real estate transactions—purchases, sales, leases, exchanges, or other dispositions. If you only make an oral agreement, the courts will not enforce it. Both parties must sign the written contract for it to be valid. The courts have stressed that the Statute of Frauds exists to reduce fraud and perjury tied to oral testimony (Smith v. Hi-Speed, Inc., 536 S.W.3d 458).

Contracts Involving the Payment of Money

Any contract involving the payment of money—loans, payment for services or goods, or real estate transfers—should be in writing. While rare exceptions exist (such as implied contracts or written acknowledgment of a verbal agreement), you should always insist on a written contract to avoid disputes.

A written contract clarifies the terms and provides legal recourse if someone fails to perform. Be sure to include:

• The full names of both parties
• The amount and method of payment
• Provisions for what happens if either party defaults

Contracts for the Sale of Goods

If you’re buying or selling goods valued over $500, Tennessee law requires a written contract (Tennessee Code § 47-2-201). Without it, courts generally won’t enforce the deal. The contract must include the names of all parties and the signature of the party charged with performance.

Exceptions exist for contracts between merchants (see Tennessee Code § 47-2-201(3) and Best Signs, Inc. v. Bobby King Design Team, Inc.). However, these are specific and limited. When in doubt, put it in writing.

Service Contracts

Service contracts must be in writing if the value exceeds $500 or if the work will take more than a year to complete. For example, hiring a contractor to paint your house for $1,000 or for a project lasting over a year both require a written agreement.

Include all service details, payment terms, and signatures from both parties. Without a written contract, you may not be able to enforce your rights if something goes wrong.

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