A legal requirement that contracts for the sale of real estate be in writing to be enforceable.
Why Statute of Frauds matters on the exam
This term belongs to Contracts. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Statute of Frauds
Every Freehold question shows why the right answer is right — and cites its source.
Under the statute of frauds, a contract for the sale of real estate must be:
Notarized by a public official
In writing and signed to be enforceable
Recorded in the county records
Prepared by a licensed attorney
Show answer & explanation
In writing and signed to be enforceable — The statute of frauds requires contracts conveying an interest in real estate to be in writing and signed by the party to be bound in order to be enforceable in court. Recording and notarization are not enforceability requirements.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
Two parties orally agree on a handshake to a price for a parcel of land, with nothing in writing. The agreement contains offer, acceptance, consideration, capacity, and legal purpose, but is missing what is required specifically for real estate contracts?
A notarized signature witnessed by a third party
Delivery of a properly executed and acknowledged deed
A written and signed document as required by the statute of frauds
Recording of the agreement in the county public records
Show answer & explanation
A written and signed document as required by the statute of frauds — Even when all essential elements of a contract are present, contracts for the sale of real property must also satisfy the statute of frauds by being in writing and signed to be enforceable.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
An 'unenforceable' contract, as distinguished from a void contract, is one that:
Never had any of the essential elements a valid contract requires at formation
Automatically becomes fully valid and enforceable in every court once both parties have placed their signatures on the document, regardless of any defense either party might later raise
Is enforceable only against whichever party happens to breach the agreement first
May have contained all essential elements at formation but cannot be enforced in court due to some legal defense, such as failing the statute of frauds
Show answer & explanation
May have contained all essential elements at formation but cannot be enforced in court due to some legal defense, such as failing the statute of frauds — An unenforceable contract may otherwise be valid, but a court will not enforce it because of a legal bar, such as an oral agreement that should have been in writing under the statute of frauds.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
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