In the NAVFAC project scenario, why did the Statute of Frauds apply?

In the NAVFAC project scenario, why did the Statute of Frauds apply?

• A. A party's $5.2 million price used in bid, but project awarded to other
• B. The project had a short duration
• C. The contract was for goods only
• D. The contract was oral and not subject to Statute Frauds

Answer: (A)

The Statute of Frauds applies to contracts that must be in writing to be enforceable, especially large construction or design-build agreements. In this NAVFAC scenario, the bid price of $5.2 million signals a high-value contract for construction services. When the value is that large, the agreement to perform the work would typically need to be memorialized in a written contract (and often also because long projects can extend beyond a year). Even if the project is ultimately awarded to another bidder, the price terms discussed in the bid would require a written agreement to be enforceable; an oral agreement at that level of value would be insufficient under the Statute of Frauds. The other options don’t fit because this is a construction/services project, not a goods-only contract, and the duration or an oral agreement alone wouldn’t negate the need for a writing at that level of price.

The Statute of Frauds applies to contracts that must be in writing to be enforceable, especially large construction or design-build agreements. In this NAVFAC scenario, the bid price of $5.2 million signals a high-value contract for construction services. When the value is that large, the agreement to perform the work would typically need to be memorialized in a written contract (and often also because long projects can extend beyond a year). Even if the project is ultimately awarded to another bidder, the price terms discussed in the bid would require a written agreement to be enforceable; an oral agreement at that level of value would be insufficient under the Statute of Frauds.

The other options don’t fit because this is a construction/services project, not a goods-only contract, and the duration or an oral agreement alone wouldn’t negate the need for a writing at that level of price.