CHAPTER 26. STATUTE OF FRAUDS

State Codes and Statutes

Statutes > Texas > Business-and-commerce-code > Title-3-insolvency-fraudulent-transfers-and-fraud > Chapter-26-statute-of-frauds

BUSINESS AND COMMERCE CODE

TITLE 3. INSOLVENCY, FRAUDULENT TRANSFERS, AND FRAUD

Sec. 26.01. PROMISE OR AGREEMENT MUST BE IN WRITING. (a) A

promise or agreement described in Subsection (b) of this section

is not enforceable unless the promise or agreement, or a

memorandum of it, is

(1) in writing; and

(2) signed by the person to be charged with the promise or

agreement or by someone lawfully authorized to sign for him.

(b) Subsection (a) of this section applies to:

(1) a promise by an executor or administrator to answer out of

his own estate for any debt or damage due from his testator or

intestate;

(2) a promise by one person to answer for the debt, default, or

miscarriage of another person;

(3) an agreement made on consideration of marriage or on

consideration of nonmarital conjugal cohabitation;

(4) a contract for the sale of real estate;

(5) a lease of real estate for a term longer than one year;

(6) an agreement which is not to be performed within one year

from the date of making the agreement;

(7) a promise or agreement to pay a commission for the sale or

purchase of:

(A) an oil or gas mining lease;

(B) an oil or gas royalty;

(D) a mineral interest; and

(8) an agreement, promise, contract, or warranty of cure

relating to medical care or results thereof made by a physician

or health care provider as defined in Section 74.001, Civil

Practice and Remedies Code. This section shall not apply to

pharmacists.

Acts 1967, 60th Leg., vol. 2, p. 2343, ch. 785, Sec. 1. Amended

by Acts 1977, 65th Leg., p. 2053, ch. 817, Sec. 21.01, eff. Aug.

29, 1977; Acts 1987, 70th Leg., ch. 551, Sec. 1, eff. Aug. 31,

1987.

Amended by:

Acts 2005, 79th Leg., Ch.

187, Sec. 1, eff. September 1, 2005.

Sec. 26.02. LOAN AGREEMENT MUST BE IN WRITING. (a) In this

section:

(1) "Financial institution" means a state or federally chartered

bank, savings bank, savings and loan association, or credit

union, a holding company, subsidiary, or affiliate of such an

institution, or a lender approved by the United States Secretary

of Housing and Urban Development for participation in a mortgage

insurance program under the National Housing Act (12 U.S.C.

Section 1701 et seq.).

(2) "Loan agreement" means one or more promises, promissory

notes, agreements, undertakings, security agreements, deeds of

trust or other documents, or commitments, or any combination of

those actions or documents, pursuant to which a financial

institution loans or delays repayment of or agrees to loan or

delay repayment of money, goods, or another thing of value or to

otherwise extend credit or make a financial accommodation. The

term does not include a promise, promissory note, agreement,

undertaking, document, or commitment relating to:

(A) a credit card or charge card; or

(B) an open-end account, as that term is defined by Section

301.002, Finance Code, intended or used primarily for personal,

family, or household use.

(b) A loan agreement in which the amount involved in the loan

agreement exceeds $50,000 in value is not enforceable unless the

agreement is in writing and signed by the party to be bound or by

that party's authorized representative.

subject to Subsection (b) of this section shall be determined

solely from the written loan agreement, and any prior oral

agreements between the parties are superseded by and merged into

the loan agreement.

(d) An agreement subject to Subsection (b) of this section may

not be varied by any oral agreements or discussions that occur

before or contemporaneously with the execution of the agreement.

(e) In a loan agreement subject to Subsection (b) of this

section, the financial institution shall give notice to the

debtor or obligor of the provisions of Subsections (b) and (c) of

this section. The notice must be in a separate document signed by

the debtor or obligor or incorporated into one or more of the

documents constituting the loan agreement. The notice must be in

type that is boldface, capitalized, underlined, or otherwise set

out from surrounding written material so as to be conspicuous.

The notice must state substantially the following:

"This written loan agreement represents the final agreement

between the parties and may not be contradicted by evidence of

prior, contemporaneous, or subsequent oral agreements of the

parties.

"There are no unwritten oral agreements between the parties.

_________________

______________________

"Debtor or Obligor

Financial Institution"

(f) If the notice required by Subsection (e) of this section is

not given on or before execution of the loan agreement or is not

conspicuous, this section does not apply to the loan agreement,

but the validity and enforceability of the loan agreement and the

rights and obligations of the parties are not impaired or

affected.

(g) All financial institutions shall conspicuously post notices

that inform borrowers of the provisions of this section. The

notices shall be located in such a manner and in places in the

institutions so as to fully inform borrowers of the provisions of

this section. The Finance Commission of Texas shall prescribe the

language of the notice.

Added by Acts 1989, 71st Leg., ch. 831, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 1997, 75th Leg., ch. 1396, Sec. 34, eff.

Sept. 1, 1997; Acts 1999, 76th Leg., ch. 62, Sec. 7.47, eff.

Sept. 1, 1999.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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