Legal Memorandum: Waiver of Statute of Frauds Defense in AL

Issue: Under Alabama law, how is the Statute of Frauds defense waived?

Rule 8(c) provides that the statute of frauds defense must be “set forth affirmatively” in a “pleading to a preceding pleading.”  Fed. R. Civ. P. 8(c).  Raising the Alabama statute of frauds as a defense for the first time on a summary judgment motion is not sufficient.  Smyth v. Smith, 667 So. 2d 717, 719 (Ala. 1995).  In short, when, the statute of frauds is not pleaded in the answer as required, it is waived.

In fact, of course, as both the statute and caselaw make clear, agreements themselves need not be in writing or signed as long as there is “some note or memorandum there of expressing the consideration” in writing and subscribed by the party to be charged.  Ala. Code § 8-9-2; Wilma Corp v. Fleming Foods, 613 So. 2d 359, 362 (Ala. 1993) (no formal or complete contract required, rather a note or memorandum containing the essential elements of the agreement, signed by the party to be charged is sufficient).  Moreover, a writing contemporaneous with the agreement is not required; the written memorandum may be made and signed at any time before or after the agreement is reached.  Restatement (Second) of Contracts § 136; see In re McAllister, 215 B.R. 217 (Bankr. N.D. Ala. 1996).

Even if the letter of intent did not exist there is another “writing” that may satisfy the statute.  See Restatement (Second) of Contracts § 133 cmt. d (“A written pleading, stipulation or deposition may serve as a memorandum […]