East Mississippi Community College

ECON 2123

Chapter 17-WRITING, ELECTRONIC FORMS, AND INTERPRETATION OF CONTRACTS

TRUE/FALSE

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

2. 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.

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

4. 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.

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

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

7. 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.

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

9. 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.

10. 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.      

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

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

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

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

15. 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.

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

17. 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.

18. 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.

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

20. 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.