Contracts and Sales Multistate Bar Practice Exam

What is the consequence of noncompliance with the Statute of Frauds?

1. The contract becomes automatically enforceable

2. The K must be renegotiated

3. The affected party may raise it as a defense

4. The agreement is invalid in all circumstances

The correct answer is: The affected party may raise it as a defense

The consequence of noncompliance with the Statute of Frauds primarily allows the affected party to raise it as a defense in a legal dispute regarding the contract. The Statute of Frauds requires certain types of contracts, such as those for the sale of goods over a certain value or contracts that cannot be performed within one year, to be in writing to be enforceable. If a contract falls under the Statute of Frauds but fails to meet its requirements, the party that did not comply can invoke this statute to contest enforceability. This means that if one party tries to enforce a contract that should have been in writing but wasn’t, the other party can defend against enforcement by arguing the noncompliance with the Statute of Frauds. The key element here is that it does not render the contract invalid in all circumstances; rather, it provides a specific avenue for defense against enforcement due to a lack of required documentation. There can be circumstances under which an agreement might still be enforceable, such as when there is partial performance or reliance that would warrant equitable relief. The understanding of the Statute of Frauds emphasizes that it is a mechanism meant to protect parties from being bound by oral agreements in contexts where written documentation is necessary for clarity and