Leasing License Practice Exam

What are the three reasons a contract may be unenforceable?

1. Illegality, lack of writing, expired statute of limitations

2. Verbal agreement, minor signer, not notarized

3. Absence of signatures, invalid purpose, unpaid consideration

4. Lapsed time, ambiguous terms, lack of agreement

The correct answer is: Illegality, lack of writing, expired statute of limitations

The correct answer identifies three well-established reasons that can make a contract unenforceable: illegality, lack of writing, and expired statute of limitations. Illegality refers to contracts that involve activities or terms that violate the law. If a contract's purpose or terms are unlawful, courts will not enforce it. The lack of writing relates to certain contracts that, by law, must be in written form to be enforceable. For instance, contracts involving the sale of real estate or those that cannot be performed within one year typically require written documentation. The expired statute of limitations refers to the legal timeframe within which a party must bring a lawsuit to enforce a contract. If this timeframe has elapsed, even if the contract was valid at the time of creation, the court may refuse to enforce it due to the expiration of the allowed period for legal action. The other options contain elements that do not universally qualify as reasons for unenforceability. While verbal agreements can be binding in certain contexts, they may not be enforceable in situations that require written contracts. A minor signer does not necessarily render a contract unenforceable, as it may depend on the nature of the contract and the jurisdiction. Similarly, ambiguity in terms may lead to disputes but does not