National Real Estate Practice Exam

Which contracts must be in writing according to the Statute of Frauds?

1. Contracts under $500

2. All real estate contracts for the sale of land

3. Any contract signed verbally

4. Only lease agreements under one year

The correct answer is: All real estate contracts for the sale of land

The correct answer is that all real estate contracts for the sale of land must be in writing according to the Statute of Frauds. This legal principle was established to prevent fraudulent claims and misunderstandings regarding contractual obligations, particularly in transactions that involve significant financial stakes like real estate. The Statute of Frauds specifically requires certain types of contracts to be in writing to be enforceable, and real estate transactions are one of the most notable examples. This requirement helps ensure that there is a clear, documented agreement between parties, which is essential in real estate dealings where disputes can arise over ownership, terms of sale, or other significant factors. For instance, if a buyer and seller were to agree on a property verbally, and later disputes arose regarding the terms of that agreement, the lack of a written contract could complicate the resolution process. Written contracts provide a concrete record of the transaction details, such as price, property description, and conditions, which protects the interests of both parties. In contrast, contracts under $500, verbal contracts, and lease agreements under one year do not typically require written documentation to be enforceable under the Statute of Frauds, making those options less applicable in this context. Therefore, the requirement for all real estate contracts to