Which term refers to the body of law designed to prevent fraudulent contracts?

• A. Statutes of fraud
• B. Risk
• C. COD (collect on delivery)
• D. Implied warranty of merchantability

Answer: (B)

The concept here is Statutes of Frauds, laws that require certain contracts to be in writing to be enforceable and to help prevent fraudulent or misrepresented agreements. These statutes specify which kinds of contracts must be memorialized in writing—such as those involving the sale of real property, contracts that cannot be completed within one year, promises to pay the debt of another, and, for goods, contracts above a certain value under the UCC. The writing must include essential terms and be signed by the party against whom enforcement is sought. If the contract isn’t in writing when required, it’s generally unenforceable, even if there was a verbal agreement. The other terms don’t fit this concept: risk is a broad insurance concept, COD is a payment method, and the implied warranty of merchantability concerns the quality of goods rather than contract enforceability.