There are exceptions to the statute of frauds that courts may use at times to avoid an unfair legal result. This occurs occasionally in circumstances where applying the statute of frauds mechanically would result in an unfair result. The Texas Supreme Court requires a very strong showing that it would be fraudulent to apply this law technically.
Promissory estoppel is one rule that is sometimes used to allow enforcement of an oral contract that would typically be unenforceable under the statute of frauds. In order to convince a Texas court that it would be proper to enforce a contract that would normally fall under the requirement of writing it must be shown that:
- There was a promise made that a person should have expected would cause the the other party an injury that was definite and substantial,
- that injury actually occurred and
- it would be impossible to avoid the injury if the court did not require the enforcement of the contract.
Promissory estoppel also can evade the requirement that a contract be in writing when the oral promise was to sign a contract that would be satisfied the legal requirement that the contract be in writing.
The partial performance exception involves an oral agreement that does not satisfy the statute of frauds. If a contract has already been partially performed that can weigh heavily in favor of a party asking a court to enforce an agreement. However, it must be clear that the partial performance is a result of the oral agreement.