As Recommended by Senate Committee on



S.B. 531 amends a statute of frauds requirement dealing with credit agreements to add to the exclusions from this requirement: open-end or closed-end promissory notes, deposit account agreements, and agreements in connection with deposit accounts for the payment of overdrafts.

The bill also clarifies that a debtor or a creditor may not maintain an action for legal or equitable relief or a defense, based in either case upon a failure to perform on an alleged credit agreement, unless the material terms and conditions of the agreement are in writing and signed by the creditor and the debtor.

Failure to comply with the requirements noted above or with provisions requiring certain items be included in credit agreements shall preclude an action or defense based on any of the following legal or equitable theories: an implied agreement based on course of dealing or performance or on a fiduciary relationship; promissory or equitable estoppel; part performance; or negligent representation.


The bill was supported by the Kansas Bankers Association. Current law (K.S.A. 16-117 and 118) is a statute on frauds which requires that to be enforceable by the debtor or the creditor, agreements by a financial institution to extend credit must be in writing and signed by the creditor and the debtor, contain a clear and conspicuous notice to the debtor that the writing is the entire agreement between the lender and the borrower, and provide space for any provision of the agreement not in the form to be written in. The statute also requires the debtor and the creditor to sign an affirmation that there are no unwritten oral credit agreements between them.

Thirty-eight states have laws similar to S.B. 531.

The bill has no fiscal impact on the state.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at