Question 1

The parol evidence rule generally excludes words spoken before or at the time a written contract was executed from contradicting the terms of the contract.

Accepted Answer

The parol evidence rule does indeed generally exclude words spoken before or at the time a written contract was executed from contradicting the terms of the contract.

Question 2

The statute of frauds applies to promises to answer for another party's debt, but does not apply to a promise to answer for another party's default.

Accepted Answer

The statute of frauds applies to promises to answer for another party's debt and default.

Question 3

Because many oral contracts are legally enforceable, it is a good business practice in the preliminary stages of discussions to stipulate that no binding agreement is intended to be formed until a written contract is prepared and signed by the parties.

Accepted Answer

This statement is true. While oral contracts can be legally enforceable in certain circumstances, it is generally better to have all agreements and terms put in writing to avoid any misunderstandings or disputes. It is also a common practice in business negotiations to include a clause stating that no binding agreement will be formed until a written contract is signed.

Question 4

When the main purpose of the promisor's promise to pay the debt of another is to benefit the promisor, the statute of frauds is not applicable, and the oral promise to pay the debt is binding.

Accepted Answer

The answer of When the main purpose of the promisor's...

Question 5

Under the majority view, a contract that does not satisfy the statute of frauds is voidable.

Accepted Answer

According to the majority view, a contract that does not satisfy the statute of frauds is voidable, meaning that the parties have the option to either enforce or void the contract.

Question 6

A father's oral promise to his daughter and her fiancée made in consideration of their contemplated marriage is binding when made in the course of a serious discussion.

Accepted Answer

The answer of A father's oral promise to his daughter...

Question 7

The parol evidence rule generally precludes testimony that would contradict a complete written contract.

Accepted Answer

The parol evidence rule restricts the introduction of extrinsic evidence to modify or contradict the terms of a written agreement. This rule only allows for evidence that explains the meaning of a term or resolves an ambiguity present in the written contract.

Question 8

Under the statute of frauds, an oral contract must be completed within one year after performance begins.

Accepted Answer

The statute of frauds requires certain types of contracts to be in writing to be enforceable, but it does not stipulate that an oral contract must be completed within one year after performance begins. Instead, it generally states that contracts that cannot be performed within one year must be in writing to be enforceable.

Question 9

A person who is prevented from enforcing a contract because of the statute of frauds also is prevented from recovering the value of services, property, or money furnished the other party to the oral contract.

Accepted Answer

The statute of frauds prevents the enforcement of certain types of contracts unless they are in writing, but it does not prevent the recovery of the value of services, property, or money furnished the other party under the oral contract. However, proving the existence and terms of the oral contract may be more difficult without a written agreement.

Question 10

An oral agreement to supply a line of credit for two (2) years cannot be enforced because of the statute of frauds.

Accepted Answer

The statute of frauds requires certain types of contracts to be in writing to be enforceable, and contracts that cannot be performed within one year fall under this requirement, making an oral agreement for a two-year line of credit unenforceable.

Question 11

A writing required by the statute of frauds may be in any form.

Accepted Answer

The statute of frauds requires certain contracts to be in writing, but it does not specify a particular form, as long as the writing includes the essential terms and is signed by the party to be charged.

Question 12

When a contract falls within the statute of frauds, the signatures of both parties must be shown to the court.

Accepted Answer

The statute of frauds requires only that the contract be signed by the party against whom enforcement is sought, not necessarily both parties.

Question 13

In the absence of a statute requiring a writing, a contract may be oral or written.

Accepted Answer

In common law, a contract does not have to be in writing unless a statute or common law rule requires it to be in writing. Otherwise, an oral contract is just as enforceable as a written contract.

Question 14

The parol evidence rule is based on the theory that either there never was an oral agreement or, if there was, the parties purposely abandoned it when they executed their written contract.

Accepted Answer

The parol evidence rule states that extrinsic evidence, including oral agreements, cannot be used to contradict or supplement the terms of a written contract. The rule is based on the idea that the parties intended their written contract to be the complete and final expression of their agreement. Therefore, any prior or contemporaneous oral agreements are deemed irrelevant and unenforceable.

Question 15

When a contract may be terminated at will by either party, the statute of frauds is not applicable because the contract may be terminated within one year.

Accepted Answer

The statute of frauds only requires certain contracts to be in writing. When a contract can be terminated by either party at any time, it is not required to be in writing and therefore, the statute of frauds is not applicable.

Question 16

A promise to pay an attorney a fee owed by a third person can be enforced without a writing.

Accepted Answer

According to the Statute of Frauds, promises to pay debts of third parties must be in writing to be enforceable.

Question 17

A promise to grant a mortgage on real property does not require written proof because it is not a transfer of land.

Accepted Answer

A mortgage on real property is a security interest in the property and affects ownership rights. Therefore, it must be in writing and recorded in accordance with state law.

Question 18

A contract for the sale of goods with a price of $500 or more requires written proof to be enforceable.

Accepted Answer

This requirement is outlined in the Statute of Frauds under the Uniform Commercial Code (UCC).

Question 19

A signed letter from an employer setting forth details of an oral contract of employment satisfies the statute of frauds.

Accepted Answer

A signed letter from an employer can satisfy the statute of frauds if it includes the essential terms of the oral contract and is signed by the party to be charged, as it provides written evidence of the agreement.

Question 20

An insurance company cannot refuse to pay the fire loss of the buyer of a house on the grounds that the sales contract for the house was not binding because it was not properly signed.

Accepted Answer

The insurance policy covers the loss of the house from fire, regardless of the validity of the sales contract.

Quiz 17: Writing, Electronic Forms, and Interpretation of Contracts