Which statement about the Statute of Frauds is true?

• A. All contracts must be in writing
• B. Only real estate contracts must be in writing
• C. The Statute of Frauds applies to personal loans
• D. Certain contracts must be in writing to be enforceable

Answer: (D)

The main idea being tested is that the Statute of Frauds requires only certain contracts to be in writing in order to be enforceable. This is why the correct statement is that certain contracts must be in writing to be enforceable—it's not saying every contract must be in writing, nor is it limited only to real estate or to personal loans. The Statute of Frauds sets specific categories (often including contracts for land, agreements that cannot be performed within one year, promises to pay the debt of another, contracts made in consideration of marriage, and certain contracts for the sale of goods) that must have a written form to be enforceable in court. A writing should identify the parties, the subject matter, and the essential terms (such as price or consideration) and is typically signed by the party to be bound; electronic signatures can meet this requirement in many jurisdictions. If a contract doesn’t fall into one of these categories, it may still be enforceable orally for other purposes, but for those covered categories, a writing is essential.