Maryland Home Improvement PSI Practice Exam

Why might an oral agreement for the purchase of a home be unenforceable?

1. The agreement does not comply with the Statute of Frauds.

2. Oral agreements are never enforceable in court.

3. It is not assignable by novation between the parties.

4. The oral agreement does not include the agent.

The correct answer is: The agreement does not comply with the Statute of Frauds.

An oral agreement for the purchase of a home might be unenforceable primarily because it does not comply with the Statute of Frauds. The Statute of Frauds is a legal doctrine that requires certain types of contracts, including those for the sale of real estate, to be in writing and signed by the parties involved to be enforceable. This requirement protects parties from fraudulent claims and ensures that there is clear documentation of the transaction's terms. While there are some exceptions where oral agreements can be recognized under specific circumstances, real estate transactions typically fall under this statute, and failure to have a written agreement can render the oral contract invalid. This is crucial in real estate transactions due to the significant financial implications and the need for clear terms regarding the property involved. Other options, while they may seem relevant, do not accurately capture the primary reason for enforceability issues related to oral agreements in the context of real estate.