In order to be responsible for another person’s debt, the promise to pay the debt or the guarantee of the debt must be in writing and signed by you. There are some exceptions to the general rule that requires a writing signed by you promising to pay the debt of another or guaranteeing the debt before you may be responsible to pay the debt. One of the exceptions to the general rule known as the Statute of Frauds involves married couples where, for instance, one of the spouses authorizes work to be performed on their jointly owned home in which case there is a presumption that either spouse had the power to act for both and bind both spouses. Another exception to the Statute of Frauds involves an oral promise or guarantee to pay another person’s debt where the purpose in making the guarantee or promise serves your own financial or business interest. An example of this exception, known as the “leading object” rule, would be the owner of a business making an oral guarantee or promise to pay the business’ debt.
The Statute of Frauds also requires any modification to a written promise to pay the debt of another must also be in writing signed by you. An example is where you sign a written document guaranteeing the debt of a third party. In order for a change in the guarantee to be enforceable against you, any change to that written guarantee must also be in writing signed by you. There is, of course, an exception to the requirement that a modification of a written promise or guarantee for the debt of another be in writing. That exception, known as the estoppel concept, allows a written guarantee or promise to be responsible for the debt of another to be modified orally if your words or actions induce the creditor to not follow all of the terms of the written promise or guarantee to the creditor’s detriment and where the creditor justifiably relies on your words and deeds instead of your written promise or guarantee. Remember the Statute of Frauds requires a written promise or guarantee signed by you before you can be held responsible for the debt of another person.