ExpertHard1 markMultiple Choice
CPA · Question 13 · Area II: Business Law
Which of the following oral contracts is enforceable under the Statute of Frauds?
Which of the following oral contracts is enforceable under the Statute of Frauds?
Answer options:
A.
A contract to sell land for $400.
B.
A contract to sell a custom-made computer for $1,000 that cannot be resold in the ordinary course of business.
C.
A contract to guarantee the debt of another.
D.
A contract for services that cannot be performed within one year.
How to approach this question
Recall the exceptions to the Statute of Frauds (SWAP): Specially manufactured goods, Written confirmation, Admitted in court, Performance.
Full Answer
B.A contract to sell a custom-made computer for $1,000 that cannot be resold in the ordinary course of business.✓ Correct
B
Under UCC §2-201, contracts for the sale of goods >= $500 generally require a writing. However, an exception exists for 'specially manufactured goods' that are not suitable for sale to others in the ordinary course of business.
Common mistakes
Focusing on the $500 threshold and ignoring the 'custom-made' exception.
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