National Real Estate Practice Exam

What does the Statute of Frauds require for certain contracts?

1. They must be verbal agreements

2. They must be in writing to be enforceable

3. They can be implied agreements

4. They can be signed electronically only

The correct answer is: They must be in writing to be enforceable

The Statute of Frauds necessitates that certain types of contracts, particularly those involving real estate transactions, must be in writing to be enforceable in a court of law. This legal principle was established to prevent fraud and misunderstandings in significant agreements, recognizing that matters such as buying or selling land or leases exceeding a certain duration should be documented to ensure clarity and accountability. By requiring written contracts, the Statute of Frauds aims to provide a clear record of the terms agreed upon by the parties involved, which helps prevent disputes and provides a basis for legal recourse if necessary. Though there may be exceptions to this rule, such as contracts that are fully performed, the general guideline stands that the writing serves as critical evidence of the agreement's existence and terms. While verbal agreements and implied agreements might be valid under certain circumstances or for less formal contracts, they are not sufficient for those specified under the Statute of Frauds. Moreover, while electronic signatures can be a modern way to fulfill writing requirements in some contexts, the notion that contracts can only be signed electronically is a misunderstanding of the broader principles involved in contract enforceability as set by the Statute of Frauds.