True / False Questions: Writing

Chapter 16
Writing
True / False Questions

1. A signature is sufficient to form the basis of authenticity of a written
contract.
True
False
2. The statute of frauds applies exclusively to executory contracts.

True
False
3. The statute of frauds does not cover contracts in which marriage is the
consideration.
True
False
4. The statute of frauds covers all contracts that are for an indefinite period
of time.
True
False
5. An administrator makes an oral promise to pay the debts of the deceased

from the funds of the decedents estate. The debts amount to $60,000.
This oral promise is enforceable.
True
False
6. In order to satisfy the writing requirement of the statute of frauds, both

parties must sign the writing.
True
False
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7. An oral contract within the UCC statute of frauds can be enforced without
a writing only if it involves the sale of specially manufactured goods.
True
False
8. Some courts allow promissory estoppel to bind parties to oral contracts

that otherwise would be unenforceable under the statute of frauds.
True
False
9. Article 2 of the UCC has no parol evidence rule.

True
False
10 Parol evidence can be used to contradict the terms of a partially

. integrated contract.
True
False
11 Parol evidence can be used to resolve ambiguities in a completely

. integrated written contract.
True
False
12 The parol evidence rule blocks evidence of subsequent agreements that

. modify a completely integrated written contract.
True
False
13 In general, ambiguities in a written agreement are resolved against the

. party who drafted the agreement.
True
False
14 If the parties make an agreement that is partly printed and partly

. handwritten, the handwritten provisions prevail over the printed
provisions in case of a conflict between them.
True
False
15 According to the general rules of interpretation of contracts, ordinary

. words are given their general meanings and the technical ones are given
their technical meaning.
True
False
Multiple Choice Questions

16 Which of the following is covered by the statute of frauds?
.
A.
B.
C.
D.
A real estate mortgage

A $300 contract for the sale of pencils
A contract that can be performed within a week
A $100 VCR repair
17 The statute of frauds requires that:

.
A.
B.
C.
D.
some contracts be evidenced by a writing.

all contracts involving fraud must be void.
all three-party contracts be collateral ones.
there can be no secondary debts in a contract.
18 Under the _____, no writing is required where the guarantor makes a

. collateral promise for the main purpose of obtaining some personal
economic advantage.
A.
B.
C.
D.
parol evidence rule

leading object rule
collateral contract rule
part performance rule
19 Rick tells Dan that Sue will inherit a mansion if she pays him back an old
. debt. Since Sue is unable to pay the debt, Dan offers to pay it provided
that he gets the mansion from Rick. The agreement between Dan and
Rick need not be in writing under the:
A.
B.
C.
D.
collateral contract rule.

parol evidence rule.
leading object rule.
part performance rule.
20 When the consideration given in exchange for the collateral promise is

. something the guarantor seeks primarily for his own benefit rather than
for the benefit of the primary debtor, the contract:
A.
B.
C.
D.
is the opposite of an original contract.

is considered void.
is outside the statute of frauds.
needs to be in writing.
21 Which of the following is true of the statute of frauds?

.
A. It prevents the use of oral evidence to contradict the terms of a written
contract.
B. It applies to all contracts having consideration valued at $500 or more.
C. It requires the independent promise to pay the debt of another to be in
writing.
D.
It applies to all real estate leases.
22 Most states statutes of frauds do not require land leases to be in writing
. unless they:
A.
B.
C.
D.
involve more than two parties.

are ancestral property.
are going to be sold permanently.
are for a year or more.
23 Why is the contract for the insurance of a building not covered within the
. real estate provision of the statute of frauds?
A. It does not involve the transfer of interests in land.

B.
It involves a physical asset.
C.
It involves two or more parties.
D.
It need not be in writing.
24 An oral contract for the sale of land that has been completely performed
. by the vendor:
A.
B.
C.
D.
is part of the statute of frauds.

can be enforced without any writing.
needs to be signed by the parties.
has to be testified by witnesses.
25 Big Bank is a major creditor of Bonwill Department Store. After a major

. loss in profits due to poor holiday sales, Big Bank decides to help keep
Bonwill from bankruptcy. Big bank orally promises Mary Tudor, a supplier
to Bonwills, that it will guarantee Bonwills payment for goods that Mary
sells to Bonwill. Most likely, Big Banks oral agreement:
A. is unenforceable under the statute of frauds.

B. is unenforceable because it is a collateral contract.
C. is enforceable under the main purpose or leading object exception
to the statute.
D. is enforceable because a collateral contract is not covered under the
statute of frauds.
26 Smith and Benson make an oral contract for the sale of some land at a
. price of $500,000. After paying Smith $400,000 of the purchase price,
Benson takes possession of the land. One month later, Smith wants to
boot Benson off the land. His argument is that the parties oral agreement
is unenforceable under the Statute of Frauds. Which of the following is
most correct?
A. Smith is correct, because the contract is for an amount greater than

$500.
B. Smith is correct, because this is an oral contract for the sale of real
estate.
C. Smith is incorrect, because the contract is for an indefinite period of
time.
D. Smith is incorrect, because Benson paid part of the purchase price and
took possession.
27 Which statement about the Statute of Frauds is true?
.
A. All contracts must be in writing in order to be enforced.
B. Contracts for the sale of goods for $500 or more must be in writing in
order to be enforced.
C. Contracts for the sale of land for $500 or more must be in writing in
order to be enforced
D. All employment contracts must be in writing in order to be enforced.
28 On May 1, Dix and Wilk entered into an oral agreement by which Dix
. agreed to purchase a small parcel of land from Wilk for $450. Dix paid
Wilk $100 as a deposit. The following day, Wilk received another offer to
purchase the land for $650, the fair market value. Wilk immediately
notified Dix that Wilk would not sell the land for $450. If Dix sues Wilk for
specific performance, Dix will:
A. prevail, because the amount of the contract was less than $500.
B. prevail, because there was part performance.
C. lose, because the fair market value of the land is over $500.
D. lose, because the agreement was not in writing and signed by Wilk.
29 Sean made an oral promise to sell a piece of land to Manny. Manny took a
. huge loan from the bank by mortgaging everything he had. After taking
almost half the money from Manny, Sean decides that he wants to sell the
land to Jason who is offering a higher price for the property. Which of the
following doctrines can Manny take recourse to in order to implement his
oral contract with Sean?
A.
B.
C.
D.
Integration
Subsequent agreement
Confirmatory memorandum
Part performance
30 A contract that cannot be performed within one year from the day on
. which it comes into existence:
A.
B.
C.
D.
is within the statute of frauds.

need not be in writing.
is called a unilateral contract.
is essentially illegal.
31 A bilateral contract is taken out of the statute of frauds when:

.
A. it is completed within a year from the day of its existence.
B. it is fully performed by at least one party.
C.
it is put in writing.
D.
it has strict rules of performance.
32 Guy and Boyd make an oral contract whereby Guy agrees to sell Boyd,
. 480 widgets (goods) at a price of $480. Later, the parties want to modify
the contract so that the price would become $520. This modification:
A.
must be in writing.
B. must be oral because the first contract was oral.
C.
can be oral but need not be.
D. is unenforceable because the first contract is unenforceable.
33 With regard to an agreement for the sale of real estate, the Statute of
. Frauds:
A.
B.
C.
D.
does not require that the agreement be signed by all parties.

does not apply if the value of the real estate is less than $500.
requires that the entire agreement be in a single writing.
requires that the purchase price be equal to the value of the real
estate.
34 The marriage provision in the statute of frauds is inapplicable in

. agreements that involve:
A.
B.
C.
D.
post-nuptial promises.
oral one-sided promises of marriage.
only mutual promises to marry.
pre-nuptial promises.
35 In order to satisfy the Statute of Frauds, the parties writing must be:
.
A.
B.
C.
D.
signed by both parties.

in legalese.
signed by the party to be charged.
compressed into a single document.
36 Which of the following is true regarding the Statute of Frauds writing

. requirement?
A. The writing must be contained in one document.

B. The writing must be signed by both parties.
C. The writing must be signed by the buyer.
D. The writing must indicate the parties identities.
37 Whose signatures are needed in order to satisfy the Statute of Frauds?

.
A. Only the signatures of witnesses to the agreement are required.
B. Only the signature the party, attempting to enforce the contract, is
required.
C. Only the signature of the party against whom enforcement is being
sought.
D. Only the signature of the third party to the contract, the beneficiary, is
required.
38 If it is not indicated in the memorandum, where should the parties sign to
. make it enforceable?
A.
B.
C.
D.
Right corner
Left corner
Bottom
Any place on memorandum
39 The Uniform Commercial Code changed the traditional Statute of Frauds

. rule by making it:
A.
B.
C.
D.
easier to satisfy that rule.

mandatory to have contracts in writing.
apply to service contracts only.
apply to real estate contracts only.
40 A memorandum on the sale of goods that does not indicate the _____ of
. goods to be sold will not satisfy the UCCs writing requirement.
A.
B.
C.
D.
quality
quantity
delivery
cost
41 The confirmatory memorandum exception to the UCCs Statute of

. Frauds provision:
A. requires that the memorandum be signed by the party to be bound.

B. requires that the memorandum be sent within ten days after the
contract is made.
C. applies even though the memorandum does not satisfy the UCCs
writing requirement.
D. requires that both parties to the contract be merchants.
42 King sent Foster, a real estate developer, a signed offer to sell a specified
. parcel of land to Foster for $200,000. King, an engineer, had inherited the
land. Foster telephoned King the same day that he received his letter and
accepted the offer. Which of the following statements concerning the
contract is correct under the Statute of Frauds?
A. No contract was formed because Foster did not sign the offer.
B. No contract was formed because King is not a merchant.
C. A contract was formed, although it would be enforceable only against
King.
D. A contract was formed but it is unenforceable.
43 The underlying purpose of the Statute of Frauds is to:
.
A.
B.
C.
D.
prevent frauds in general.

corroborate the existence of the oral contract.
punish those who commit frauds.
make fraud illegal.
44 Which of the following is a uniform state law designed to remove barriers

. to electronic commerce by validating and effectuating electronic records
and signatures?
A. The Uniform Electronic Transactions Act (UETA)

B. The Electronic Signatures in Global and National Commerce Act (ESign)
C. The Electronic Communications Privacy Act (ECPA)
D.
The Graham-Leach-Bliley Act (GLB)
45 The Electronic Signatures in Global and National Commerce Act (E-Sign):
.
A. invalidates agreements between parties conducting transactions by
electronic means.
B. states that electronic transactions on subjects covered by the statute of
frauds require an additional writing.
C. overrides state laws that are inconsistent with the UETA.
D. creates barriers to e-commerce by invalidating electronic records and
digital signatures.
46 Bruce told Adam that he was selling his house in Syracuse, New York.
. Adam sent Bruce an e-mail containing an offer of $300,000 for the house.
Bruce responded via e-mail that he wanted $315,000 for the house. After
further e-mails, the parties finally agreed on a sale with a price of
$310,000. A series of e-mails contained the terms of the sale, and all
included a salutation containing their typewritten names. However, Bruce
later decided to sell the house to Marty for $325,000. Adam sued Bruce,
claiming that Bruce breached their contract for the sale of the house.
Most likely, Adam will:
A. lose, because the contract does not meet the statute of frauds.
B.
lose under the parol evidence rule.
C. win, because the essential terms of the contract were set forth in the
signed e-mails.
D. win, because of the partial performance exception to the statute of
frauds.
47 The parol evidence rule is relevant only in cases:

.
A.
that are oral in nature.
B. where parties have expressed an agreement.
C.
involving the sale of goods.
D. where subsequent modification do not have a suitable consideration.
48 Sammy entered into an oral contract with Macaulay for sale of goods
. amounting to $900. Sammy paid the amount. But Macaulay refused to
deliver the goods. Sammy thus suffered serious losses because of
Macaulays breach of contract. Sammy sued Macaulay. At the same time
Macaulay took the defense under statute of frauds. Under which principle
is Sammy protected?
A.
B.
C.
D.
Tortious liability
Vicarious liability
Part performance
Promissory estoppel
49 April and Brian entered into a completely integrated written contract.

. Before the written contract was completed, April made an oral statement
to Brian regarding the terms of the contract. This statement was not
contained in the written contract. Under the parol evidence rule, evidence
of Aprils oral statement would be admissible if it were used to:
A.
create a completely new agreement.
B. introduce an ambiguous term in the written contract.
C. prove an additional term consistent with the written agreement.
D. change the terms of the written contract.
50 Which of the following is admissible with respect to a partially integrated

. contract?
A. Evidence that seeks to make the contract completely divisible.

B. Evidence that resolves ambiguities in the contract.
C. Evidence that the contract is unconditional on the happening of some
event.
D. Evidence that contradicts the contracts provisions.
51 A fully integrated contract under the parol evidence rule is one that:
.
A. is intended by the parties to include both goods and services.
B. is intended by the parties to include several agreements.
C. is intended by the parties to be a preliminary statement of their
agreement.
D. is intended by the parties to be the complete, exclusive statement of
their agreement.
52 A merger clause is also known as an:
.
A.
B.
C.
D.
interpretation clause.
interrogation clause.
integration clause.
instrumental clause.
53 Ward is attempting to introduce oral evidence in an action relating to a

. written contract between Ward and Weaver. Weaver has pleaded the parol
evidence rule. Ward will be prohibited from introducing parol evidence if it
relates to:
A. a modification made several days after the contract was executed.

B. a change in the meaning of an unambiguous provision in the contract.
C.
fraud in the inducement.
D.
an obvious error in drafting.
54 Abel hired Carr to restore Abels vintage car for $800. The terms of their
. oral agreement provided that Carr was to complete the work within 18
months. Actually, the work could be completed within one year. Can Abel
insist that the work be completed within a year instead of the 18
months?
A. No, because the agreement covers services with a value in excess of

$500.
B. No, because the agreement covers a time period in excess of one year.
C. Yes, because personal service contracts are exempt from the Statute of
Frauds.
D. Yes, because the work can be completed within one year.
55 A written agreement was signed by two parties and it was intended to be
. their entire agreement. The parol evidence rule will prevent the admission
of evidence that is offered to:
A. prove the existence of a contemporaneous oral agreement that

modifies the contract.
B. prove the existence of a subsequent oral agreement that modifies the
contract.
C. explain the meaning of an ambiguity in the written contract.
D. establish that fraud had been committed in the formation of the
contract.
Essay Questions
56 Davis owes a $5 million debt to the C Bank. He also owes $2 million to

. Samuel. However right now, Davis is having trouble paying either loan. C
Bank is willing to finance Davis debt, but only if Samuel co-signs. Samuel,
who fears that hell get nothing on his $2 million loan if Davis doesnt get
some help from the bank, is willing to do so. Thus, C Bank, Samuel and
Davis complete a three-party agreement in which the bank agrees to
finance the $5 million debt, Davis agrees to pay it back at a certain rate
over a certain term, and Samuel agrees to pay the debt in the event that
Davis first defaults. Is this agreement covered by the statute of frauds?
Why or why not?
57 Ned and Bill complete an oral contract for the sale of land from Ned to Bill
. for $100,000. Bill pays Ned the $100,000, and then begins to build his
house on the land. At this point, Ned says that the deal is off and refuses
to convey the deed to Bill. In doing so, Ned relies on the statute of frauds.
Is this agreement enforceable by Bill?
58 Jones goes to a clothing store and orders $1000 worth of clothing on

. credit. The salesperson writes up a receipt describing the terms of the
deal, but Jones does not sign anything. Three days later, the store delivers
$750 worth of clothing, which Jones accepts. One day later, however,
Jones decides that he doesnt want the clothing. When the store insists
that he has to pay the full $1000, Jones pleads the statute of frauds. Does
the statute of frauds give Jones a defense against payment here?
59 In entering into contracts for services, customers might be influenced by

. statements made by sales representatives. Businesses offering services
often use standardized form contracts. Under the parol evidence rule, precontract statements made in these circumstances are effectively
unenforceable. How can a business effectively and ethically use
standardized form contracts and the parol evidence rule?
60 Arnold promised to sell his car to Adams in lieu of full payment of his
. debt. However in the written contract, Arnold had forgotten to specify
which car he wants to sell. Is there any remedy?
Chapter 16 Writing Answer Key
True / False Questions

1.
A signature is sufficient to form the basis of authenticity of a written

contract.
TRUE
A persons signature on a written contract allows a basis for the
contract to be authenticated, or proved to be genuinely that of the
signers.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 16-01 List the contracts that must be evidenced by a writing under the statute of frauds.
Topic: The Significance of Writing in Contract Law
2.
The statute of frauds applies exclusively to executory contracts.

TRUE
The statute of frauds applies only to executory contracts. If an oral
contract has been completely performed by both parties, the fact that it
did not comply with the statute of frauds would not be a ground for
rescission of the contract.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Topic: Overview of the Statute of Frauds
3.
The statute of frauds does not cover contracts in which marriage is the
consideration.
FALSE
Contracts of marriage are covered by the statute of frauds.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Topic: Overview of the Statute of Frauds
4.
The statute of frauds covers all contracts that are for an indefinite
period of time.
FALSE
The statute of frauds covers contracts that have a definite period of
time.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Topic: Contracts Covered by the Statute of Frauds
5.
An administrator makes an oral promise to pay the debts of the

deceased from the funds of the decedents estate. The debts amount to
$60,000. This oral promise is enforceable.
TRUE
No writing is required when an executor or administrator of the
deceased promises to pay the latters debts from the funds of the
decedents estate. The statute of frauds requires a writing, however, if
the executor promises to pay one of the decedents debts out of her
own (the executors) funds.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
Learning Objective: 16-02 Explain the exceptions to the statute of frauds.
6.
In order to satisfy the writing requirement of the statute of frauds, both

parties must sign the writing.
FALSE
Most states require only a memorandum of the parties agreement;
they do not require that the entire contract be in writing or that it be
signed.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 16-03 Explain how to satisfy the statute of frauds under both the common law and UCC.
Topic: Meeting the Requirements of the Statute of Fraud
7.
An oral contract within the UCC statute of frauds can be enforced

without a writing only if it involves the sale of specially manufactured
goods.
TRUE
An oral contract within the UCC statute of frauds can be enforced
without a writing in some situations involving the sale of specially
manufactured goods. This exception to the writing requirement will
apply only if the nature of the specially manufactured goods is such
that they are not suitable for sale in the ordinary course of the sellers
business.
AACSB: Ethics
Blooms: Remember
Difficulty: 2 Medium
8.
Some courts allow promissory estoppel to bind parties to oral contracts

that otherwise would be unenforceable under the statute of frauds.
TRUE
The doctrine of promissory estoppel enables some parties to recover
under oral contracts that the statute of frauds would ordinarily render
unenforceable. It is used as a mechanism to reduce the statutes
potential for creating unfair results.
AACSB: Ethics
Blooms: Remember
9.
Article 2 of the UCC has no parol evidence rule.

FALSE
The parol evidence rule has been included in the UCC (2-202) and is
applicable to contracts for the sale of goods as well as contracts
governed by the common law of contracts.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 16-04 Explain the parol evidence rule and the exceptions to the rule.
Topic: The Parol Evidence Rule
10.
Parol evidence can be used to contradict the terms of a partially

integrated contract.
FALSE
In order for the parol evidence rule to come into effect, the contract has
to be completely integrated. It is not applicable to partially integrated
contracts.
AACSB: Ethics
Blooms: Remember
11.
Parol evidence can be used to resolve ambiguities in a completely

integrated written contract.
TRUE
Parol evidence is used to resolve ambiguities in the written contracts. It
is used by courts to interpret them.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
12.
The parol evidence rule blocks evidence of subsequent agreements that

modify a completely integrated written contract.
FALSE
The parol evidence rule does not forbid parties from introducing proof
of subsequent agreements. This is true even if the terms of the later
agreement cancel, subtract from, or add to the obligations stated in the
written contract.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
13.
In general, ambiguities in a written agreement are resolved against the

party who drafted the agreement.
TRUE
If the contract was drafted by one of the parties, any ambiguities will be
resolved against that particular party.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Topic: Interpretation of Contracts
14.
If the parties make an agreement that is partly printed and partly

handwritten, the handwritten provisions prevail over the printed
provisions in case of a conflict between them.
TRUE
When the parties use a form contract or some other type of contract
that is partially printed and partially handwritten, the handwritten
provisions will prevail.
AACSB: Ethics
Blooms: Remember
15.
According to the general rules of interpretation of contracts, ordinary

words are given their general meanings and the technical ones are
given their technical meaning.
TRUE
Courts have rules that Ordinary words will be given their usual meaning
and technical words (such as those that have a special meaning in the
parties trade or business) will be given their technical meaning, unless
a different meaning was clearly intended.
AACSB: Ethics
Blooms: Remember
Multiple Choice Questions
16.
Which of the following is covered by the statute of frauds?
A.
A real estate mortgage
B.
A $300 contract for the sale of pencils
C. A contract that can be performed within a week
D.
A $100 VCR repair
Contracts for the sale of an interest in real estate are covered by the
statute of frauds.
AACSB: Ethics
Blooms: Apply
Difficulty: 1 Easy
17.
The statute of frauds requires that:
A. some contracts be evidenced by a writing.

B. all contracts involving fraud must be void.
C. all three-party contracts be collateral ones.
D. there can be no secondary debts in a contract.
Some contracts under the statute of frauds need to be written rather
than oral.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
18.
Under the _____, no writing is required where the guarantor makes a

collateral promise for the main purpose of obtaining some personal
economic advantage.
A.
B.
C.
D.
parol evidence rule

leading object rule
collateral contract rule
part performance rule
Under the leading object rule, no writing is required where the

guarantor makes a collateral promise for the main purpose of obtaining
some personal economic advantage. When the consideration given in
exchange for the collateral promise is something the guarantor seeks
primarily for his own benefit, it is considered to be similar to an original
contract.
AACSB: Ethics
Blooms: Remember
19.
Rick tells Dan that Sue will inherit a mansion if she pays him back an
old debt. Since Sue is unable to pay the debt, Dan offers to pay it
provided that he gets the mansion from Rick. The agreement between
Dan and Rick need not be in writing under the:
A.
B.
C.
D.
collateral contract rule.

parol evidence rule.
leading object rule.
part performance rule.
Under the leading object rule, no writing is required where the

guarantor makes a collateral promise for the main purpose of obtaining
some personal economic advantage. When the consideration given in
exchange for the collateral promise is something the guarantor seeks
primarily for his own benefit, it is considered to be similar to an original
contract.
AACSB: Analytic
Blooms: Remember
20.
When the consideration given in exchange for the collateral promise is

something the guarantor seeks primarily for his own benefit rather than
for the benefit of the primary debtor, the contract:
A.
B.
C.
D.
is the opposite of an original contract.

is considered void.
is outside the statute of frauds.
needs to be in writing.
When the consideration given in exchange for the collateral promise is

something the guarantor seeks primarily for his own benefit rather than
for the benefit of the primary debtor, the contract is outside the statute
of frauds and need not be in writing.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
21.
Which of the following is true of the statute of frauds?
A. It prevents the use of oral evidence to contradict the terms of a

written contract.
B. It applies to all contracts having consideration valued at $500 or
more.
C. It requires the independent promise to pay the debt of another to be
in writing.
D.
It applies to all real estate leases.
The statute of frauds requires an independent promise to pay the debt
of another to be in writing. This is due to the fact that such a promise is
considered to be an original promise and would have to be given in
written in order for it to be enforceable.
AACSB: Ethics
Blooms: Remember
22.
Most states statutes of frauds do not require land leases to be in

writing unless they:
A.
B.
C.
D.
involve more than two parties.

are ancestral property.
are going to be sold permanently.
are for a year or more.
Most states do not require land leases to be in writing unless they are
long-term, that is, a year or more.
AACSB: Ethics
Blooms: Remember
23.
Why is the contract for the insurance of a building not covered within
the real estate provision of the statute of frauds?
A. It does not involve the transfer of interests in land.

B.
It involves a physical asset.
C.
It involves two or more parties.
D.
It need not be in writing.
Any contract that creates or transfers an interest in land is within the
statute of frauds. However, the contract to insure a building does not
involve any transfer of interests in land, and therefore, is not covered
by the statute of frauds.
AACSB: Ethics
Blooms: Understand
24.
An oral contract for the sale of land that has been completely
performed by the vendor:
A.
B.
C.
D.
is part of the statute of frauds.

can be enforced without any writing.
needs to be signed by the parties.
has to be testified by witnesses.
An oral contract for the sale of land that has been completely
performed by the vendor (seller) is taken out of the statute of
fraudsthat is, is enforceable without writing.
AACSB: Ethics
Blooms: Remember
25.
Big Bank is a major creditor of Bonwill Department Store. After a major

loss in profits due to poor holiday sales, Big Bank decides to help keep
Bonwill from bankruptcy. Big bank orally promises Mary Tudor, a
supplier to Bonwills, that it will guarantee Bonwills payment for goods
that Mary sells to Bonwill. Most likely, Big Banks oral agreement:
A. is unenforceable under the statute of frauds.

B. is unenforceable because it is a collateral contract.
C. is enforceable under the main purpose or leading object
exception to the statute.
D. is enforceable because a collateral contract is not covered under the
statute of frauds.
Under the main purpose or leading object rule, no writing is required
where the guarantor makes a collateral promise for the main purpose of
obtaining some personal economic advantage. In this case the oral
contract would be treated like an original and enforceable contract.
AACSB: Analytic
Blooms: Apply
26.
Smith and Benson make an oral contract for the sale of some land at a
price of $500,000. After paying Smith $400,000 of the purchase price,
Benson takes possession of the land. One month later, Smith wants to
boot Benson off the land. His argument is that the parties oral
agreement is unenforceable under the Statute of Frauds. Which of the
following is most correct?
A. Smith is correct, because the contract is for an amount greater than

$500.
B. Smith is correct, because this is an oral contract for the sale of real
estate.
C. Smith is incorrect, because the contract is for an indefinite period of
time.
D. Smith is incorrect, because Benson paid part of the purchase price
and took possession.
According to the part performance doctrine Benson has the right of
possession of the land and Smith cannot boot him off it.
AACSB: Analytic
Blooms: Apply
27.
Which statement about the Statute of Frauds is true?
A. All contracts must be in writing in order to be enforced.

B. Contracts for the sale of goods for $500 or more must be in writing in
order to be enforced.
C. Contracts for the sale of land for $500 or more must be in writing in
order to be enforced
D. All employment contracts must be in writing in order to be enforced.
According to section 2-201 of the UCC, contracts for the sale of goods
for $500 or more must be in writing in order to be enforced.
AACSB: Ethics
Blooms: Remember

28.
On May 1, Dix and Wilk entered into an oral agreement by which Dix
agreed to purchase a small parcel of land from Wilk for $450. Dix paid
Wilk $100 as a deposit. The following day, Wilk received another offer
to purchase the land for $650, the fair market value. Wilk immediately
notified Dix that Wilk would not sell the land for $450. If Dix sues Wilk
for specific performance, Dix will:
A. prevail, because the amount of the contract was less than $500.
B. prevail, because there was part performance.
C. lose, because the fair market value of the land is over $500.
D. lose, because the agreement was not in writing and signed by Wilk.
A contract to sell or mortgage land has to be evidenced by a written
agreement.
AACSB: Analytic
Blooms: Apply
29.
Sean made an oral promise to sell a piece of land to Manny. Manny took
a huge loan from the bank by mortgaging everything he had. After
taking almost half the money from Manny, Sean decides that he wants
to sell the land to Jason who is offering a higher price for the property.
Which of the following doctrines can Manny take recourse to in order to
implement his oral contract with Sean?
A.
B.
C.
D.
Integration
Subsequent agreement
Confirmatory memorandum
Part performance
If it is proved that the person seeking enforcement has reasonably

relied on the contract and not implementing it would lead to severe
injustice, he/she can take recourse to the doctrine of part performance
as a remedy for this breach of contract.
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
30.
A contract that cannot be performed within one year from the day on
which it comes into existence:
A.
B.
C.
D.
is within the statute of frauds.

need not be in writing.
is called a unilateral contract.
is essentially illegal.
A bilateral, executory contract that cannot be performed within one

year from the day on which it comes into existence is within the statute
of frauds and must be evidenced by writing.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
31.
A bilateral contract is taken out of the statute of frauds when:
A. it is completed within a year from the day of its existence.

B. it is fully performed by at least one party.
C.
it is put in writing.
D.
it has strict rules of performance.
Most states hold that a bilateral contract that has been fully performed
by one of the parties is taken out of the statute of frauds and is
enforceable without any writing.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
32.
Guy and Boyd make an oral contract whereby Guy agrees to sell Boyd,
480 widgets (goods) at a price of $480. Later, the parties want to
modify the contract so that the price would become $520. This
modification:
A.
must be in writing.
B. must be oral because the first contract was oral.
C.
can be oral but need not be.
D. is unenforceable because the first contract is unenforceable.
According to section 2-201, contracts for the sale of goods for the price
of $500 or more, are unenforceable unless written.
AACSB: Analytic
Blooms: Apply
33.
With regard to an agreement for the sale of real estate, the Statute of
Frauds:
A. does not require that the agreement be signed by all parties.

B. does not apply if the value of the real estate is less than $500.
C. requires that the entire agreement be in a single writing.
D. requires that the purchase price be equal to the value of the real
estate.
Any contract that creates or transfers an interest in land is within the
statute of frauds. Such contracts are considered to be valid and binding
even if they are oral in nature.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
34.
The marriage provision in the statute of frauds is inapplicable in

agreements that involve:
A.
B.
C.
D.
post-nuptial promises.
oral one-sided promises of marriage.
only mutual promises to marry.
pre-nuptial promises.
The statute of frauds also requires a writing when marriage is the

consideration to support a contract. The marriage provision has been
interpreted to be inapplicable to agreements that involve only mutual
promises to marry.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
35.
In order to satisfy the Statute of Frauds, the parties writing must be:
A.
B.
C.
D.
signed by both parties.

in legalese.
signed by the party to be charged.
compressed into a single document.
The contents of the memorandum must be signed by the party to be

charged. However, it is considered in the best interests of both parties
that their signatures appear in the contract.
AACSB: Ethics
Blooms: Remember
36.
Which of the following is true regarding the Statute of Frauds writing

requirement?
A. The writing must be contained in one document.

B. The writing must be signed by both parties.
C. The writing must be signed by the buyer.
D. The writing must indicate the parties identities.
In general, a contract covered under the Statute of Frauds should
contain the identities of the parties (indicated in some ways) and the
subject matter.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
37.
Whose signatures are needed in order to satisfy the Statute of Frauds?
A. Only the signatures of witnesses to the agreement are required.

B. Only the signature the party, attempting to enforce the contract, is
required.
C. Only the signature of the party against whom enforcement is being
sought.
D. Only the signature of the third party to the contract, the beneficiary,
is required.
The memorandum must be signed by the party to be charged, or
against whom the contract is being enforced, or his authorized agent.
However, it is advisable for both parties to sign the agreement.
AACSB: Ethics
Blooms: Remember
38.
If it is not indicated in the memorandum, where should the parties sign

to make it enforceable?
A.
B.
C.
D.
Right corner
Left corner
Bottom
Any place on memorandum
Unless the statute expressly provides that the memorandum or

contract must be signed at the end, the signature may appear
anywhere on the memorandum.
AACSB: Ethics
Blooms: Remember
39.
The Uniform Commercial Code changed the traditional Statute of

Frauds rule by making it:
A.
B.
C.
D.
easier to satisfy that rule.

mandatory to have contracts in writing.
apply to service contracts only.
apply to real estate contracts only.
The UCC provides several exceptions and ways to satisfy the

sometimes stringent rules of the Statue of Frauds.
AACSB: Ethics
Blooms: Understand
Difficulty: 1 Easy
40.
A memorandum on the sale of goods that does not indicate the _____ of
goods to be sold will not satisfy the UCCs writing requirement.
A.
B.
C.
D.
quality
quantity
delivery
cost
According to the UCC a memorandum on the sale of goods may omit or

incorrectly state certain terms and yet be enforceable. However, the
memorandum is not enforceable for more than the quantity of goods
stated in it. Thus, a writing that does not indicate the quantity of goods
to be sold would not satisfy the Codes writing requirement.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
41.
The confirmatory memorandum exception to the UCCs Statute of

Frauds provision:
A. requires that the memorandum be signed by the party to be bound.

B. requires that the memorandum be sent within ten days after the
contract is made.
C. applies even though the memorandum does not satisfy the UCCs
writing requirement.
D. requires that both parties to the contract be merchants.
The confirmatory memorandum is the official confirmation memo of the
contract. The confirmatory exception to the UCC rules can be applied
if both the parties in a contract are merchants.
AACSB: Ethics
Blooms: Remember
Difficulty: 3 Hard
42.
King sent Foster, a real estate developer, a signed offer to sell a

specified parcel of land to Foster for $200,000. King, an engineer, had
inherited the land. Foster telephoned King the same day that he
received his letter and accepted the offer. Which of the following
statements concerning the contract is correct under the Statute of
Frauds?
A. No contract was formed because Foster did not sign the offer.
B. No contract was formed because King is not a merchant.
C. A contract was formed, although it would be enforceable only against
King.
D. A contract was formed but it is unenforceable.
According to the doctrine of confirmatory memorandum this is a valid
contract and it is enforceable against King.
AACSB: Analytic
Blooms: Apply
43.
The underlying purpose of the Statute of Frauds is to:
A.
B.
C.
D.
prevent frauds in general.

corroborate the existence of the oral contract.
punish those who commit frauds.
make fraud illegal.
The underlying purpose of the statute of frauds is to provide more

evidence of the existence of a contract than the mere oral testimony of
one of the parties.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
44.
Which of the following is a uniform state law designed to remove

barriers to electronic commerce by validating and effectuating
electronic records and signatures?
A. The Uniform Electronic Transactions Act (UETA)

B. The Electronic Signatures in Global and National Commerce Act (ESign)
C. The Electronic Communications Privacy Act (ECPA)
D.
The Graham-Leach-Bliley Act (GLB)
The Uniform Electronic Transactions Act is a proposed uniform state law
that was designed to remove barriers to electronic commerce by
validating and effectuating electronic records and signatures. The
UETA has been enacted in 47 states and the District of Columbia at the
time of this writing.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Topic: Meeting the Requirements of the Statute of Frauds
45.
The Electronic Signatures in Global and National Commerce Act (ESign):
A. invalidates agreements between parties conducting transactions by

electronic means.
B. states that electronic transactions on subjects covered by the statute
of frauds require an additional writing.
C. overrides state laws that are inconsistent with the UETA.
D. creates barriers to e-commerce by invalidating electronic records and
digital signatures.
E-Sign broadly interprets the concept of electronic signatureusing, in
fact, the same statutory definition of electronic signature as that which
is used in UETA (Uniform Electronic Transactions Act). E-Sign overrides
any state law that is inconsistent with UETA, thus helping to harmonize
U.S. law about the interaction of formal requirements such as the
statute of frauds and electronic contracts.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
46.
Bruce told Adam that he was selling his house in Syracuse, New York.
Adam sent Bruce an e-mail containing an offer of $300,000 for the
house. Bruce responded via e-mail that he wanted $315,000 for the
house. After further e-mails, the parties finally agreed on a sale with a
price of $310,000. A series of e-mails contained the terms of the sale,
and all included a salutation containing their typewritten names.
However, Bruce later decided to sell the house to Marty for $325,000.
Adam sued Bruce, claiming that Bruce breached their contract for the
sale of the house. Most likely, Adam will:
A. lose, because the contract does not meet the statute of frauds.
B.
lose under the parol evidence rule.
C. win, because the essential terms of the contract were set forth in the
signed e-mails.
D. win, because of the partial performance exception to the statute of
frauds.
According to the UETA the emails exchanged by Bruce and Adam are
evidence of a valid contract having existed between the two.
AACSB: Analytic
Blooms: Apply
47.
The parol evidence rule is relevant only in cases:
A.
that are oral in nature.
B. where parties have expressed an agreement.
C.
Involving the sale of goods.
D. where subsequent modification do not have a suitable consideration.
The parol evidence rule is relevant only in cases in which the parties
have expressed their agreement in a written contract. Thus, it would
not apply to a case involving an oral contract or to a case in which
writings existed that were not intended to embody the final statement
of at least part of the parties contract.
AACSB: Ethics
Blooms: Remember
48.
Sammy entered into an oral contract with Macaulay for sale of goods
amounting to $900. Sammy paid the amount. But Macaulay refused to
deliver the goods. Sammy thus suffered serious losses because of
Macaulays breach of contract. Sammy sued Macaulay. At the same
time Macaulay took the defense under statute of frauds. Under which
principle is Sammy protected?
A.
B.
C.
D.
Tortious liability
Vicarious liability
Part performance
Promissory estoppel
The doctrine of promissory estoppel provides relief to a party which is

in danger of serious losses due to a breach of contract.
AACSB: Analytic
Blooms: Apply
49.
April and Brian entered into a completely integrated written contract.

Before the written contract was completed, April made an oral
statement to Brian regarding the terms of the contract. This statement
was not contained in the written contract. Under the parol evidence
rule, evidence of Aprils oral statement would be admissible if it were
used to:
A.
create a completely new agreement.
B. introduce an ambiguous term in the written contract.
C. prove an additional term consistent with the written agreement.
D. change the terms of the written contract.
Parol evidence comes into effect when parties desire to introduce
evidence of statements or agreements that would supplement rather
than contradict the written contract
AACSB: Analytic
Blooms: Apply
Difficulty: 1 Easy
50.
Which of the following is admissible with respect to a partially

integrated contract?
A. Evidence that seeks to make the contract completely divisible.

B. Evidence that resolves ambiguities in the contract.
C. Evidence that the contract is unconditional on the happening of
some event.
D. Evidence that contradicts the contracts provisions.
A partially integrated contract is one that expresses the parties final
agreement as to some but not all of the terms of their contract. When a
contract is only partially integrated, the parties are permitted to use
parol evidence to prove the additional terms of their agreement.
AACSB: Ethics
Blooms: Remember
51.
A fully integrated contract under the parol evidence rule is one that:
A. is intended by the parties to include both goods and services.

B. is intended by the parties to include several agreements.
C. is intended by the parties to be a preliminary statement of their
agreement.
D. is intended by the parties to be the complete, exclusive statement of
their agreement.
A completely integrated contract is one that the parties intend as a
complete and exclusive statement of their entire agreement.
AACSB: Ethics
Blooms: Remember
52.
A merger clause is also known as an:
A.
B.
C.
D.
interpretation clause.
interrogation clause.
integration clause.
instrumental clause.
A merger clause is also known as an integration clause which provides

that the written contract is the complete integration of the parties
agreement.
AACSB: Ethics
Blooms: Remember
53.
Ward is attempting to introduce oral evidence in an action relating to a

written contract between Ward and Weaver. Weaver has pleaded the
parol evidence rule. Ward will be prohibited from introducing parol
evidence if it relates to:
A. a modification made several days after the contract was executed.

B. a change in the meaning of an unambiguous provision in the
contract.
C.
fraud in the inducement.
D.
an obvious error in drafting.
Parol evidence is allowed so long as it does not tamper with a clearly
worded clause or term in the existing agreement.
AACSB: Analytic
Blooms: Apply
54.
Abel hired Carr to restore Abels vintage car for $800. The terms of their
oral agreement provided that Carr was to complete the work within 18
months. Actually, the work could be completed within one year. Can
Abel insist that the work be completed within a year instead of the 18
months?
A. No, because the agreement covers services with a value in excess of

$500.
B. No, because the agreement covers a time period in excess of one
year.
C. Yes, because personal service contracts are exempt from the Statute
of Frauds.
D. Yes, because the work can be completed within one year.
The additional information may be allowed as additional terms as parol
evidence even though the contract is oral. Hence, Abel can insist on
Carr completing his work within a year.
AACSB: Analytic
Blooms: Apply
55.
A written agreement was signed by two parties and it was intended to

be their entire agreement. The parol evidence rule will prevent the
admission of evidence that is offered to:
A. prove the existence of a contemporaneous oral agreement that

modifies the contract.
B. prove the existence of a subsequent oral agreement that modifies
the contract.
C. explain the meaning of an ambiguity in the written contract.
D. establish that fraud had been committed in the formation of the
contract.
In partially integrated agreements, only that evidence is allowed which
proves additional terms of the agreement.
AACSB: Ethics
Blooms: Remember
Difficulty: 1 Easy
Essay Questions
56.
Davis owes a $5 million debt to the C Bank. He also owes $2 million to

Samuel. However right now, Davis is having trouble paying either loan.
C Bank is willing to finance Davis debt, but only if Samuel co-signs.
Samuel, who fears that hell get nothing on his $2 million loan if Davis
doesnt get some help from the bank, is willing to do so. Thus, C Bank,
Samuel and Davis complete a three-party agreement in which the bank
agrees to finance the $5 million debt, Davis agrees to pay it back at a
certain rate over a certain term, and Samuel agrees to pay the debt in
the event that Davis first defaults. Is this agreement covered by the
statute of frauds? Why or why not?
No, the statute of frauds does not apply to this agreement. Although it
appears to be a collateral contract, the leading object rule applies
because Samuel obviously is acting in his own interest here.
AACSB: Analytic
Blooms: Apply
Difficulty: 3 Hard
57.
Ned and Bill complete an oral contract for the sale of land from Ned to
Bill for $100,000. Bill pays Ned the $100,000, and then begins to build
his house on the land. At this point, Ned says that the deal is off and
refuses to convey the deed to Bill. In doing so, Ned relies on the statute
of frauds. Is this agreement enforceable by Bill?
Yes. Although the statute of frauds provision regarding the sale of real
estate interests applies here and there was no writing, Bills actions put
him within the part performance exception for this provision of the
statute. Thus, the contract is enforceable.
AACSB: Ethics
Blooms: Apply
58.
Jones goes to a clothing store and orders $1000 worth of clothing on

credit. The salesperson writes up a receipt describing the terms of the
deal, but Jones does not sign anything. Three days later, the store
delivers $750 worth of clothing, which Jones accepts. One day later,
however, Jones decides that he doesnt want the clothing. When the
store insists that he has to pay the full $1000, Jones pleads the statute
of frauds. Does the statute of frauds give Jones a defense against
payment here?
This is a contract for the sale of goods in an amount equaling or

exceeding $500; so the UCC statute of frauds applies. However, there is
no adequate writing, since Jones did not sign the receipt. Despite this,
the Codes exception for part delivery seems to apply, as Jones
accepted the goods. As a result, Jones is liable for the goods accepted
(worth $750), but not for the full $1000.
AACSB: Analytic
Blooms: Apply
59.
In entering into contracts for services, customers might be influenced

by statements made by sales representatives. Businesses offering
services often use standardized form contracts. Under the parol
evidence rule, pre-contract statements made in these circumstances
are effectively unenforceable. How can a business effectively and
ethically use standardized form contracts and the parol evidence rule?
This can be done by including a merger or integration clause which

provides that the written contract is the complete integration of the
parties agreement. This will help a business to effectively use the parol
evidence rule to prevent a party from introducing sales representatives
pre-contractual statements in court. The written contract should also be
clear to avoid ambiguities, because parol evidence may be introduced
to resolve the ambiguity. Sales representatives should be trained to
know the difference between a sales pitch and misrepresentation, or
undue influence. They should review the terms of the contract with the
customer to ensure their understanding of the terms.
AACSB: Reflective Thinking
Blooms: Understand
Difficulty: 3 Hard
60.
Arnold promised to sell his car to Adams in lieu of full payment of his
debt. However in the written contract, Arnold had forgotten to specify
which car he wants to sell. Is there any remedy?
Yes. He can recourse to the parol evidence rule because it can offer to
explain any ambiguities in the written contract.
AACSB: Analytic
Blooms: Apply

True / False Questions: Writing

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Chapter 16

True / False Questions

2. The statute of frauds applies exclusively to executory contracts.

5. An administrator makes an oral promise to pay the debts of the deceased

6. In order to satisfy the writing requirement of the statute of frauds, both

8. Some courts allow promissory estoppel to bind parties to oral contracts

9. Article 2 of the UCC has no parol evidence rule.

10 Parol evidence can be used to contradict the terms of a partially

11 Parol evidence can be used to resolve ambiguities in a completely

12 The parol evidence rule blocks evidence of subsequent agreements that

13 In general, ambiguities in a written agreement are resolved against the

14 If the parties make an agreement that is partly printed and partly

15 According to the general rules of interpretation of contracts, ordinary

Multiple Choice Questions

A real estate mortgage

17 The statute of frauds requires that:

some contracts be evidenced by a writing.

18 Under the _____, no writing is required where the guarantor makes a

parol evidence rule

collateral contract rule.

20 When the consideration given in exchange for the collateral promise is

is the opposite of an original contract.

21 Which of the following is true of the statute of frauds?

involve more than two parties.

A. It does not involve the transfer of interests in land.

is part of the statute of frauds.

25 Big Bank is a major creditor of Bonwill Department Store. After a major

A. is unenforceable under the statute of frauds.

A. Smith is correct, because the contract is for an amount greater than

is within the statute of frauds.

31 A bilateral contract is taken out of the statute of frauds when:

does not require that the agreement be signed by all parties.

34 The marriage provision in the statute of frauds is inapplicable in

signed by both parties.

36 Which of the following is true regarding the Statute of Frauds writing

A. The writing must be contained in one document.

37 Whose signatures are needed in order to satisfy the Statute of Frauds?

39 The Uniform Commercial Code changed the traditional Statute of Frauds

easier to satisfy that rule.

41 The confirmatory memorandum exception to the UCCs Statute of

A. requires that the memorandum be signed by the party to be bound.

prevent frauds in general.

44 Which of the following is a uniform state law designed to remove barriers

A. The Uniform Electronic Transactions Act (UETA)

47 The parol evidence rule is relevant only in cases:

49 April and Brian entered into a completely integrated written contract.

50 Which of the following is admissible with respect to a partially integrated

A. Evidence that seeks to make the contract completely divisible.

53 Ward is attempting to introduce oral evidence in an action relating to a

A. a modification made several days after the contract was executed.

A. No, because the agreement covers services with a value in excess of

A. prove the existence of a contemporaneous oral agreement that

56 Davis owes a $5 million debt to the C Bank. He also owes $2 million to

58 Jones goes to a clothing store and orders $1000 worth of clothing on

59 In entering into contracts for services, customers might be influenced by

Chapter 16 Writing Answer Key

True / False Questions

A signature is sufficient to form the basis of authenticity of a written

The statute of frauds applies exclusively to executory contracts.

An administrator makes an oral promise to pay the debts of the

In order to satisfy the writing requirement of the statute of frauds, both

An oral contract within the UCC statute of frauds can be enforced

Some courts allow promissory estoppel to bind parties to oral contracts