CHAPTER 26. STATUTE OF FRAUDS
BUSINESS AND COMMERCE CODE
TITLE 3. INSOLVENCY, FRAUDULENT TRANSFERS, AND FRAUD
CHAPTER 26. STATUTE OF FRAUDS
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;
(C) minerals; or
(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.
(c) The rights and obligations of the parties to an agreement
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.