Tennessee Business Litigation Law Blog

Every attorney, if only from their law school contracts class, is intimately familiar with the statute of frauds.  This well-known doctrine specifies certain types of transactions, most notably contracts for the sale of real property, that must be reduced to writing and signed in order to be valid.  In Tennessee, the statute of frauds is codified at T.C.A. 29-2-101 which, among other things, states that: 

No action shall be brought…upon any contract for the sale of lands…unless the the promise or agreement, upon which such action shall be brought, or some    memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith. 

Interestingly, despite the frequent application of the statute of frauds, there has long remained a debate about who the “party to be charged” actually is.  There was a well established line of Tennessee case law dating back to 1857 holding that “the party to be charged” referred to the party who was the owner of land.  However, this line of case law had recently been questioned and was finally overturned by the Tennessee Supreme Court in Blair v. Brownson, 197 S.W.3d 681 (Tenn. July 11, 2006).  There, the Court held that “the party to charged,” as described in the statute of frauds, refers to the party against whom enforcement of the contract is sought.  The Court reasoned that the policy rational for the statute of frauds in 1857 may well have been to protect and give preference to landowners in contracts for the sale of land, but that this preference was not appropriate in today’s society where both parties to the contract should be protected equally.

The Court noted that Tennessee Legislature also  joined in this view by amending T.C.A. 29-2-101 during the pendency of the case to specifically state that the “party to be charged is the party against whom enforcement of the contact is sought.”

Read the full opinion here.