Statute of Frauds The statute of frauds is a law requiring that certain types of contracts be in writing to be enforceable. It is designed to prevent potential deception or fraud from oral contracts. It serves to minimize confusion in court whenever a party claims a contract is breached. Most state merely require that the contract be evidenced by writing and be signed by the party against whom enforcement is being sought. This requirement means the party being sued must have signed a note, memorandum, or another written form that describes with reasonable certainty the terms of the oral agreement. CONCEPT REVIEW: The statute of frauds requires certain types of business-related contracts to be in writing. The following contracts are required to be evidenced by a signed writing: (1) contracts involving an interest in land; (2) collateral promises to pay another person's debt; (3) contracts that cannot be performed within one year from the date of the agreement; and (4) contracts for the sale of goods of $500 or more. value: 10.00 points Read the following descriptions of an agreement and determine whether it must be in writing to be an enforceable contract. If the agreement must be in writing, drag the statement into the box designated "Writing Required by the Statute of Frauds." If the agreement does not need to be in writing under the Statute of Frauds, drag the statement into the box designated "Oral Contract Enforceable." Celia's roommate promises to buy her bike for $200. Bianca promises to paint a mural at Cindy's house next week, but it took Bianca 5 years to complete the mural. Frank the Farmer promises to sell Danielle the Developer 100 acres of his farmland. Frank the Farmer agrees to give a coal company mining rights under his land. Holly's mom promises Pete that she will pay him back the $5000 Holly owes Pete. Tim promises to build Ivy a house at some point within the next two years. Required information Writing Required by Statute of Frauds Oral Contract Enforceable 2. 3. value: 10.00 points Vicki hired Patty to paint murals in her house for $5000. Their oral agreement stated that the murals would be completed within 18 months. Actually, the murals could be completed within one year. The agreement is: enforceable because the work could be completed within one year. unenforceable because the agreement was to complete the murals in over a year. unenforceable because it covers goods with a value of over $500. enforceable because it covers services with a value of over $500. unenforceable because it covers services with a value of over $500. References Multiple Choice value: 10.00 points eBook & Resources Difficulty: 3 Hard Required information Learning Objective: 08-04 To identify instances in which mutual agreement cannot exist. Contract for the sale of goods where the buyer will use the goods to perform a service. None of the above. Contract for goods in which payment has been made or accepted. Contract for goods where the party being sued admits to there being a contract in court. Contract for goods specially made for the buyer on which the seller has begun performance. Required information Which of the following is not an exception to the Statute of Frauds' requirement that contracts involving the sale of goods for $500 or more be in writing? 4. 5. value: 10.00 points Linda bought a bag that was priced at $600. She did not sign a contract despite the rule that a sale of a good over $500 requires a written agreement. Why? Customers rarely ever return a bag. The sales receipt is the signed contract. A bag is not a good. The store is likely unaware of the Statute of Frauds. The agreement to buy and sell occurred immediately. References eBook & Resources Multiple Choice value: 10.00 points Difficulty: 3 Hard Required information Learning Objective: 08-04 To identify instances in which mutual agreement cannot exist. unenforceable because the agreement was to complete the photo shoot within 15 months. unenforceable because it covers services with a value of over $500. enforceable because it covers services with a value of over $500. enforceable because the work could be completed within one year. O unenforceable because it covers goods with a value of over $500. Required information Steve said that he would do a wildlife photo shoot for Archie's wildlife magazine for $1,000. Their oral agreement stated that the photo shoot would be completed within 15 months. Actually, the photo shoot could be completed within one year. The agreement is: 6. value: 10.00 points Alfred agreed to design the interiors of his neighbor's restaurant for $1,000. While discussing about it, they agreed that it would take 14 months. He managed to finish it in 10 months. The agreement is: unenforceable because it covers services with a value of over $500. unenforceable because the agreement was to complete the designing within 14 months. enforceable because it covers services with a value of over $500. enforceable because the work could be completed within one year. unenforceable because it covers goods with a value of over $500. References eBook & Resources Multiple Choice Required information Difficulty: 3 Hard Learning Objective: 08-04 To identify instances in which mutual agreement cannot exist.