Tennessee Contract Basics: Formation & the Statute of Frauds

A contract needs offer, acceptance, and consideration. Tennessee's statute of frauds (T.C.A. § 29-2-101) requires a signed writing for certain agreements — including a contract for the sale of land, a lease of land for more than one year, an agreement that can't be performed within one year, and a promise to answer for another's debt. Sales of goods have a separate UCC statute of frauds (T.C.A. § 47-2-201).

This is general information, not legal advice. A Tennessee attorney can review your contracts.

Most business runs on contracts. Knowing what makes one enforceable — and when it has to be in writing — protects you when a deal goes sideways.

What makes a contract

At its core, a contract needs three things:

Offer — one side proposes terms.
Acceptance — the other side agrees to those terms.
Consideration — each side gives something of value.

A handshake deal can be a valid contract — but proving it later is hard, and some agreements aren’t enforceable unless they’re written down.

The statute of frauds

Tennessee’s statute of frauds (T.C.A. § 29-2-101) requires a signed writing for certain agreements, including:

a contract for the sale of land;
a lease of land for more than one year;
an agreement that can’t be performed within one year; and
a promise to answer for another’s debt (a guaranty).

If a deal in one of these categories isn’t in a signed writing, a court may refuse to enforce it.

Goods are different

Sales of goods have a separate UCC statute of frauds (T.C.A. § 47-2-201), with its own writing requirement. So when you’re buying or selling products rather than services or land, check the UCC rule.

Next steps

If a contract has been broken, see business disputes for remedies and deadlines, or browse the business law hub. For help drafting or reviewing a contract, connect with a lawyer.

Frequently asked questions

What makes a contract valid in Tennessee?

A contract needs offer, acceptance, and consideration. Some agreements also have to be in writing to be enforceable under Tennessee's statute of frauds.

Which Tennessee contracts must be in writing?

Under the statute of frauds (T.C.A. § 29-2-101), a signed writing is required for a contract for the sale of land, a lease of land for more than one year, an agreement that can't be performed within one year, and a promise to answer for another's debt.

Do contracts for goods follow the same rule?

Sales of goods have a separate UCC statute of frauds (T.C.A. § 47-2-201), which has its own writing requirement.

Related guides

Assumed Name (DBA) Registration in Tennessee A Tennessee corporation or LLC that wants to operate under a name other than its legal name files an Application for Registration of Assumed Name with the Secretary of State; the assumed name is good for 5 years and is renewable (T.C.A. § 48-14-101 for corporations; § 48-249-106 for LLCs). Sole proprietors and general partnerships, which aren't registered with the Secretary of State, handle a business name at the county level.

Business Disputes in Tennessee When a contract is breached, remedies include money damages and, where damages are inadequate, specific performance. Tennessee's general statute of limitations for contract actions is six years (T.C.A. § 28-3-109). An exception: contracts for the sale of goods have a 4-year limit under the UCC (T.C.A. § 47-2-725).

Choosing a Business Entity in Tennessee Tennessee recognizes sole proprietorships and general partnerships (no state formation filing), LLCs (Tennessee Revised Limited Liability Company Act, T.C.A. § 48-249-101 et seq.), and corporations (Tennessee Business Corporation Act, T.C.A. § 48-11-101 et seq.), formed by filing with the Secretary of State. LLCs and corporations generally shield owners' personal assets — but they're also generally subject to Tennessee's franchise & excise tax.

How to Form a Corporation in Tennessee In Tennessee the incorporation document is called the charter (not articles of incorporation). You deliver a charter to the Secretary of State under the Tennessee Business Corporation Act (T.C.A. § 48-12-101, § 48-12-102), naming the corporation, incorporators, principal office, and registered agent, and file an annual report (§ 48-26-203). An S corporation is a federal tax election, not a Tennessee entity type. Confirm current fees on sos.tn.gov.

How to Form an LLC in Tennessee To form a Tennessee LLC you file Articles of Organization with the Tennessee Secretary of State under T.C.A. § 48-249-202, naming the registered agent and office, principal office, and management type. The LLC must maintain a registered agent (§ 48-249-109) and file an annual report (§ 48-249-1017). Tennessee charges LLC filing and annual-report fees per member ($50 per member, subject to a minimum and a maximum) — confirm the current per-member rate, floor, and cap on sos.tn.gov.

Contract Basics in Tennessee