Which type of contracts must be in writing under the Statute of Frauds?

Study for the CLEP Business Law Test. Engage with flashcards and multiple choice questions, each question has hints and explanations. Prepare effectively for your exam!

The correct answer is that contracts must be in writing under the Statute of Frauds when they involve specific types of transactions to ensure clarity and prevent fraud. Among these are contracts that guarantee the debt of another person, which require written evidence because they involve a promise that is collateral and dependent on the obligation of another party. The rationale is that such agreements can involve significant financial commitments and complexities, making it crucial to have a written record.

In addition to guarantees, the Statute of Frauds also requires certain contracts to be in writing, including contracts for the sale of goods over a specified amount (such as $500 in the Uniform Commercial Code) and contracts that cannot be completed within one year. Thus, options regarding the sale of goods and contracts longer than a year also meet the Statute of Frauds requirements, indicating they should be written to be enforceable.

In short, these requirements are meant to reduce the potential for misunderstandings and disputes regarding the terms of agreements involving significant commitments. Therefore, while option C identifies one specific requirement, options A and B also fall under the same statute's requirements for certain conditions, leading to a broader understanding that includes all elements highlighted in the choices.

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