The Judicial Admissions Exception to the Statute of Frauds: A Curiously Gradual Adoption

Abstract

The statute of frauds requires certain categories of contracts to be evidenced by a signed writing. The original purpose of the statute of frauds, indeed its titular purpose, is the prevention of the fraudulent assertion of a non-existent oral contract. Although a signed writing is the formal way in which to satisfy the statute of frauds, courts have long recognized various exceptions to the writing requirement which will be held to satisfy the statute absent a writing. The effect of such exceptions is that they constitute an alternative form of evidence for the presence of a contract. One such exception is the judicial admission of a contract – where the defendant admits in his pleadings, testimony, or otherwise in court under oath that a contract (and its terms) exists. Such judicial admission of the existence of a contract seemingly completely vindicates the primary and original purpose of the statute of frauds. A defendant that judicially admits that he or she entered into a contract, has no concern that such contract is fraudulently being asserted against him. It is, therefore, “astonishing” (to use Professor Robert Stevens’ phrase) that the judicial admissions exception completely fell out of favor in England, and then the United States in the 18th and 19th centuries, and instead the dominant majority rule became the elimination of the exception. For the stated purposes of removing the defendant’s incentive to commit perjury and falsely deny the contract in order to avoid liability, the now longstanding majority rule became that a defendant could admit the contract and yet still assert the statute of frauds defense. Such rule is of dubious justification, which is why Article 2 of the Uniform Commercial Code reinstated the judicial admissions exception in the case of contracts for the sale of goods. The rule remained virtually absent in non-goods cases, however. Thankfully, and as reported by Professor Shedd in published articles in 1984 and 1991, an embryonic judicial admissions rule began to reemerge in the early 20th century, but he observed that it remained a very small minority rule. This article updates the research to the present and observes that the rule appears to still be a minority rule although the number of adoptions has increased. Nevertheless, the rule represents sound statute of frauds policy, and should be fully implemented by case decision or statute.