Leasing License Practice Exam

A contract needs to be in writing when its term exceeds how many years?

1. 1 year

2. 2 years

3. 3 years

4. 5 years

The correct answer is: 1 year

When it comes to contracts, the Statute of Frauds requires that certain types of agreements be in writing to be enforceable. One of these types pertains to contracts that cannot be completed within one year. Thus, for a lease or any contract with a term that exceeds one year, it is necessary for the contract to be in writing. This rule aims to prevent misunderstandings and disputes that might arise from verbal agreements, especially those that involve long-term commitments. In the provided question, the specified answer indicates the threshold at which a written contract becomes essential. Contracts often involve significant details, obligations, and expectations that are difficult to recall accurately over longer periods. By requiring written contracts for terms exceeding one year, the statute helps protect both parties by clearly documenting the agreement. The other options suggest longer periods, but the fundamental legal requirement is that any agreement lasting longer than one year must be documented in writing to ensure clarity and enforceability.