Contracts and Sales Multistate Bar Practice Exam

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Enhance your knowledge for the Contracts and Sales Multistate Bar Exam. Deep-dive into our interactive quiz designed to refine your understanding with detailed explanations and example scenarios, ensuring you're ready on exam day!

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How is a contract that cannot be performed within one year effectively removed from the statute of frauds?

Through an amendment agreed upon by both parties
By full performance by at least one party
By mutual consent to terminate the contract
Through a court's declaration of validity

The correct answer is: By full performance by at least one party

A contract that cannot be performed within one year must typically be in writing to comply with the statute of frauds. However, the statute of frauds is concerned with ensuring certain contracts are documented to prevent fraudulent claims. When at least one party fully performs their obligations under the contract, that performance effectively satisfies the contract and removes it from the statute of frauds' written requirement. Full performance indicates that the parties have taken definitive actions fulfilling their parts of the agreement, demonstrating that the contract has been fully executed. This performance signifies the finality of the agreement, thus eliminating any need for a written record to establish the terms of the contract. As a result, the contract no longer falls under the scrutiny of the statute of frauds, effectively allowing the contract to be enforced despite the originally applicable one-year requirement.