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D is corrent. The requirement is to identify the correct application of the statute of fraud to a contract for land. The contract for the land was formed but it would only be enforceable against Kram because Kram’s offer was written and signed. Under the common-law statute of frauds, the contract is not enforceable against Fargo because s/he orally accepted the offer rather than agreeing with a signed writing.
A is incorrect because the contract is only enforceable against Kram because Kram’s offer was signed and written but Fargo’s acceptance was only oral.
B is incorrect because a contract was formed since the letter is sufficient to satisfy the Statute of Frauds.  Since only Kram’s signature is present, then the contract is only enforceable against Kram, but there is still a contract.
C is incorrect because the letter was sufficient to satisfy the writing requirement of the Statute of Frauds:  It identifies the parties and the nature of the contract.