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Multiple Choice

Which item is generally exempt from the statute of frauds?

The main concept here is how the statute of frauds determines which real estate contracts must be in writing. The statute of frauds targets contracts that transfer an interest in real property or cannot be completed within one year. An agreement to share a real estate commission, however, is a promise to pay for services rather than to convey property or to guarantee a land transfer. It doesn’t create or transfer an ownership interest in real estate, nor does it by itself obligate performance over a period that would trigger the one-year rule. Because of that, it’s generally exempt from the writing requirement of the statute of frauds and can be enforceable even if oral (although in practice written agreements are common for clarity). In contrast, real estate listing agreements and real estate purchase agreements are directly connected to the transfer of property or to securing that transfer, so they fall under the situations the statute of frauds covers and typically must be in writing.

The main concept here is how the statute of frauds determines which real estate contracts must be in writing. The statute of frauds targets contracts that transfer an interest in real property or cannot be completed within one year. An agreement to share a real estate commission, however, is a promise to pay for services rather than to convey property or to guarantee a land transfer. It doesn’t create or transfer an ownership interest in real estate, nor does it by itself obligate performance over a period that would trigger the one-year rule. Because of that, it’s generally exempt from the writing requirement of the statute of frauds and can be enforceable even if oral (although in practice written agreements are common for clarity).

In contrast, real estate listing agreements and real estate purchase agreements are directly connected to the transfer of property or to securing that transfer, so they fall under the situations the statute of frauds covers and typically must be in writing.