173
Chapter 15
The Statute of Frauds—
Writing Requirement
and Electronic Records
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
A1. Under the Statute of Frauds, any contract that is not in writing is void.
A2. The Statute of Frauds requires that statutes must be in writing.
A3. A contract involving property of any kind must be in writing to be enforceable.
174 TEST BANK A: UNIT THREE: CONTRACTS AND E-CONTRACTS
A4. A contract involving a lease is the only contract relating to an interest in land that
must be in writing to be enforceable.
A5. An oral contract for a transfer of an interest in land is never enforceable.
A6. A contract that by its own terms cannot be performed within a year must be in writing
to be enforceable.
A7. A contract may have to be in writing to be enforceable even if its performance is
possible within a year.
A8. If a contract to do something in certain intervals over a period of less than one year is
not in writing, it is not enforceable.
A9. A contract must be in writing to be enforceable if performance is impossible within
one year.
A10. All collateral promises must be in writing to be enforceable.
A11. A party’s oral agreement to pay another’s debt is never enforceable.
CHAPTER 15: THE STATUTE OF FRAUDS 175
A12. To be enforceable, a contract for a sale of goods priced at $50 or more must be in
writing.
A13. An oral contract for a sale of land may be enforceable if the contract has been
partially performed.
A14. There are no exceptions to the Statute of Frauds.
A15. An oral contract that must be in writing to be enforceable is not enforceable even if
the parties admit to its existence in court.
A16. To be enforceable, a memorandum evidencing an oral contract that would otherwise
be unenforceable must include the essential terms.
A17. Evidence of prior agreements that differ from the written terms of a contract can be
introduced in court to alter the contract.
A18. Parol evidence includes testimony of communications between the parties that is not
contained in the contract itself.
176 TEST BANK A: UNIT THREE: CONTRACTS AND E-CONTRACTS
A19. Oral evidence to “fill in the gaps” of a contract with incomplete terms can be
introduced at a trial.
A20. An integrated contract is a contract with more than one subject or part.
MULTIPLE CHOICE QUESTIONS
A1. Lyra induces Moe to enter into a contract for the sale of an apartment about which
Lyra fraudulently misrepresents a number of material facts. Lyra tells Moe that her
commission is 6 percent, but their signed, written contract states “12 percent.” The
Statute of Frauds governs
a. contracts that are induced by fraud.
b. contracts that must be in writing to be enforceable.
c. the admissibility in court of oral evidence.
d. the reformation of oral and written statements into one contract.
A2. Grandiloquent Properties, Inc., and Investment Capital Corporation enter into a con–
tract for a sale of land. To be enforceable, the contract must be in writing if the land is
valued at
a. more than $500.
b. more than $5,000.
c. more than $50,000.
d. any price.
CHAPTER 15: THE STATUTE OF FRAUDS 177
A3. Timber Farms, Inc., and Wood Products Corporation enter into an oral contract for the
sale of a lumber mill and the land on which it is situated from Timber to Wood. Under
the Statute of Frauds, this contract is enforceable by
a. the seller.
b. the buyer.
c. any interested third party, such as the mortgagee or title company.
d. none of the choices.
A4. Kirk Custodial Service and Green Energy Company enter into an oral contract under
which Kirk agrees to provide custodial service for Green’s facilities for two years. This
contract is enforceable by
a. Kirk.
b. Green.
c. any interested third party, such as a janitorial supplies provider.
d. none of the choices.
A5. Garden & Yard Landscaping and Penelope enter into an oral contract under which she
agrees to work on a Garden & Yard project on Valley Country Club’s golf course for
sixteen months. This contract is enforceable by
a. Garden & Yard.
b. Penelope.
c. any interested third party, such as Valley Country Club.
d. none of the choices.
178 TEST BANK A: UNIT THREE: CONTRACTS AND E-CONTRACTS
A6. Natalie agrees to assume Orina’s debt to Consumer Credit Corporation. Natalie does
not get any personal benefit for the agreement. To be enforceable, the promise must
be in writing if the debt is for
a. more than $500.
b. more than $5,000.
c. more than $50,000.
d. any amount.
A7. Steve agrees to assume a debt of Thumb Grippers Company to Main Street Bank. The
agreement is not in writing. To be enforceable, the promise must be for the benefit of
a. any party.
b. Steve.
c. Thumb Grippers.
d. Main Street.
A8. Niche Credit, Inc., is one of Cut–Rite Notching Corporation’s two major creditors.
Niche guarantees Cut–Rite’s debt to the firm’s other major creditor, Manufacturers
Capital Bank, to forestall litigation. To be enforceable, this guarantee
a. must be in writing.
b. need not be in writing if it benefits Niche Credit.
c. need not be in writing if it benefits Cut-Rite Notching.
d. need not be in writing if it benefits Manufacturers Capital Bank.
CHAPTER 15: THE STATUTE OF FRAUDS 179
A9. Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a
Discount City store, and downloads $300 worth of digital music from E-Music.com. To
be enforceable, the contract that must be in writing is the purchase of
a. the digital music, the MP3 player, and the speakers.
b. the MP3 player and the speakers only.
c. the MP3 player only.
d. the speakers only.
A10. Elle buys a new textbook for $100 and a used car for $5,000, and signs a one-year
lease for an apartment for $1,000 monthly rent to start at the beginning of the next
month. The Statute of Frauds covers
a. the apartment lease, and the textbook and car purchases.
b. the apartment lease and the car purchase only.
c. the apartment lease only.
d. the textbook and car purchases only.
A11. Pablo and Melia enter into an oral contract for Pablo’s sale to Melia of a laptop
computer for $400. Assuming the terms can be proved, the contract is enforceable by
a. the seller or the buyer.
b. the manufacturer of the laptop.
c. any third party who overheard the parties making the agreement.
d. none of the choices.
180 TEST BANK A: UNIT THREE: CONTRACTS AND E-CONTRACTS
A12. Nori files a suit against Mica to enforce an oral contract that would otherwise be
unenforceable under the Statute of Frauds. The court could enforce such a contract if
a. Nori foreseeably and justifiably relied on Mica’s promise to her detriment.
b. Mica denies the existence of any contract.
c. neither party has begun to perform.
d. the deal does not involve customized goods.
Fact Pattern 15–A1 (Questions A13–A14 apply)
Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a contract.
Macro then faxes NFC a memo on Macro’s letterhead that summarizes the items on which
they agreed, including a two-year term. Macro begins to perform, but NFC refuses to pay.
Macro files a suit to collect. NFC claims that there is no contract.
A13. Refer to Fact Pattern 15-A1. The transaction between Macro and NFC falls within the
Statute of Frauds’
a. collateral-promise provision.
b. one-year rule.
c. sales-of-goods stipulation.
d. secondary-contracts section.
A14. Refer to Fact Pattern 15-A1. Between Macro and NFC, there is
a. an oral contract only.
b. a pre-contract only.
c. a written contract.
d. no contract.
CHAPTER 15: THE STATUTE OF FRAUDS 181
A15. Uri and Vicky orally agree on the sale of Uri’s Nite Club to Vicky and note terms on a
pair of the Club’s napkins, which they both sign. A written memorandum evidencing
an oral contract that would otherwise be unenforceable must contain
a. every term.
b. the essential terms.
c. the preliminary terms.
d. the qualitative terms.
A16. Shady Oaks Development, LLC, and Rural Acres, Inc., sign a written contract for a sale
of land. In some states, to be enforceable, this contract must include
a. a correct title, such as “Land Transfer” or “Real Estate Agreement.”
b. a declaration of the contract’s purpose.
c. a statement of the consideration.
d. a description of the land.
Fact Pattern 15–A2 (Questions A17–A18 apply)
Radford and Serenity sign a written contract for the sale of Rad’s Coffee & Bagels business to
Serenity. The parties intend their written contract to be a final statement of the terms of their
agreement.
A17. Refer to Fact Pattern 15-A2. Serenity later disputes some of the provisions in the deal
with Radford. If the dispute results in litigation, a court will most likely exclude
evidence that
a. buttresses the written terms.
b. contradicts the written terms.
c. duplicates the written terms.
d. reinforces the written terms.
A18. Refer to Fact Pattern 15-A2. The writing that Radford and Serenity signed is
a. a completely integrated contract.
b. a divisibly integrated contract.
182 TEST BANK A: UNIT THREE: CONTRACTS AND E-CONTRACTS
c. a partially integrated contract.
d. a severably integrated contract.
A19. Glenn and Haji sign a written contract. Glenn claims that the parties later orally
agreed to modify it. Any oral modification is likely not enforceable if it falls under
a. the doctrine of promissory estoppel.
b. the “main purpose” exception.
c. the “partial performance” exception.
d. the Statute of Frauds.
A20. Ginamarie files a suit against Gaming Innovators Unlimited, Inc., to enforce a written
contract between the parties. If the court finds that the parties intended the contract
to be the final statement of their agreement, parol evidence can be admitted to prove
a. an orally agreed-on condition precedent.
b. terms discussed orally before the contract but not contained in it.
c. terms discussed orally at the time of the contract that contradict the written
terms.
d. nothing.
ESSAY QUESTIONS
A1. Downspout Drainage Company hires Earl to design a Web page for Downspout for
$400. Before the project is started, Downspout asks Earl to trouble-shoot
Downspout’s computer operating system software for an additional $400. Earl agrees.
The entire contract is oral. Earl completes the work, but Downspout refuses to pay.
Earl files a suit against Downspout, which raises the Statute of Frauds as a defense.
Can Earl recover from Downspout? If so, how much, and on what basis?
CHAPTER 15: THE STATUTE OF FRAUDS 183
A2. Frances has lived in an apartment for ten years when she decides to buy a house. Her
one-year lease will end on May 1. On April 15, she orally contracts to buy Smith’s
house for $100,000, with the closing (transfer of the deed) to take place on June1.
Smith’s lawyer, who is out of town on vacation, is to draft a written contract of sale on
his return to his office on May 15. Because Frances’s lease is terminating, Smith
agrees to let her take possession of the house on May 1 if Frances gives him a “down
payment” on the house of $5,000. Frances agrees and gives Smith the $5,000. She
moves into the house on May 2, and the following weekend plants trees in the back
yard. On May 10, Smith receives a written offer from Green to buy Smith’s house for
$120,000. Smith accepts Green’s offer, asks Frances to move out of the house, and
tries to return the $5,000 to Frances. Frances claims that she has an enforceable
contract to buy the house. Smith claims that any such contract must be in writing to
be enforceable under the Statute of Frauds. Who is correct and why?