Real estate contracts are like any other contract in that general principles of Arizona contract law require the existence of an offer, acceptance, consideration, and sufficient specificity of the terms in order to have an enforceable contract. In most cases, but often not in the case of a real estate contract, the above elements support an enforceable contract regardless of whether or not the parties write out the terms and/or sign a written document.
A.R.S. § 44-101 - Codifying Arizona's Statute of Frauds
In certain situations, however, there are additional requirements for a contract to be enforceable. For example, when the contract concerns the sale of real property the Statute of Frauds, codified in Arizona at A.R.S. Section 44-101(6), demands that contracts be written and signed in order to be enforceable. The statute states, in relevant part, as follows:
No action shall be brought in any court in the following cases unless the promise or agreement upon which the action is brought, or some memorandum thereof, is in writing and signed by the party to be charged, or by some person by him thereunto lawfully authorized:...6. Upon an agreement for leasing for a longer period than one year, or for the sale of real property or an interest therein. Such agreement, if made by an agent of the party sought to be charged, is invalid unless the authority of the agent is in writing, subscribed by the party sought to be charged.
So absent some exception to the general rule, an unwritten agreement for the sale or property - or a lengthy lease - will not be enforceable.
Exceptions to the Statute of Frauds
However, if you are facing a situation where the Statute of Frauds may apply you should talk to an Arizona real estate lawyer as soon as possible to discuss possible exceptions that may apply. For instance, Arizona courts have consistently held that only the signature of the "party to be charged" is required. In other words, the contract must be signed by the party against whom enforcement is sought but does not necessarily have to be signed by the charging party. For example, a seller of real estate who never signed the sales contract may successfully maintain an action against a buyer who did sign the contract.
Other exceptions may arise based on "part performance" of the contract, "complete or substantial performane," or in a situation where the doctrine of estoppel can be raised to defeat the defense of the Statute of Frauds.
The parties to an Arizona real estate contract should also remember that any amendments to the contract must also be written and signed to be enforceable. Because of the requirements of the Statute of Frauds, parties buying or selling real estate in Arizona are advised to demand written confirmation of all the terms and conditions of the real estate transaction. Frequently, agents and brokers may make representations and assurances to buyers and sellers and suggest that a written modification is unnecessary. Buyers and sellers should avoid the temptation to rely upon such assurances and ensure that all important matters are reduced to writing and signed by the other party.
Unfortunately, many Arizona real estate contracts are not written and/or signed and one or more parties find themselves with a need to seek relief from another party. If you find yourself facing such a situation you should consult with an experienced Arizona real estate lawyer as soon as possible to determine whether an exception to the Statute of Frauds might apply, or if some other legal recourse is available.