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    PracticeCPA®CPA REG Practice ExamQuestion 14
    Hard1 markMultiple Choice
    Area 2: Business LawBusiness LawContracts

    CPA · Question 14 · Area 2: Business Law

    Under the Statute of Frauds, which of the following oral contracts is legally enforceable?

    Answer options:

    A.

    A contract for the sale of goods worth 0.

    B.

    A contract to serve as a guarantor for a friend's debt.

    C.

    A contract to build a custom deck that will take 14 months to complete, but could theoretically be completed in 11 months.

    D.

    A contract for the sale of land.

    How to approach this question

    Check MY LEGS (Marriage, Year, Land, Executor, Goods >0, Surety). For the 'Year' prong, ask: Is it IMPOSSIBLE to finish in a year? If no, oral is okay.

    Full Answer

    C.A contract to build a custom deck that will take 14 months to complete, but could theoretically be completed in 11 months.✓ Correct
    The Statute of Frauds requires a writing for contracts that cannot be performed within one year. If performance is theoretically possible within a year, the oral contract is enforceable.

    Common mistakes

    Confusing 'likely to take >1 year' with 'impossible to perform within 1 year'.
    Question 13All questionsQuestion 15

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