Choice "D" is correct. As a general rule, under the statute of frauds, a contract that cannot be performed within one year from the time of its making is unenforceable absent proof of its material terms in a writing signed by the party being sued. Here, the contract by its terms could not be performed within a year from the time it was made and Gem cannot prove the material terms of the contract through a writing signed by Mason. Therefore, Gem would lose its breach of contract action.
Choice "a" is incorrect. The statute of frauds requires proof of the material terms of certain contracts to be evidenced by a writing signed by the party being sued. There is an exception to the statute if the contract has been performed. Since the contract here is executory, the exception does not apply, so Gem will lose (not be able to enforce the contract) rather than win because the contract is executory.
Choice "c" is incorrect. The statute of frauds applies to contracts other than contracts for the sale of goods. It applies to a service contract if by its terms it cannot be performed within a year. Thus, the fact that the contract here is for services rather than goods is not a reason for Gem to win the law suit to enforce the agreement with Mason. Gem will lose because the statute of frauds applies and Gem does not have a writing signed by Mason that sets out the material terms of the agreement.
Choice "b" is incorrect. The $500 threshold is not relevant to the contract here. That threshold applies to contracts for the sale of goods. The contract here is for services. What matters for service contracts is whether or not they can be performed within a year of their making. If they cannot, such as the contract here, they are within the statute of frauds regardless of the price involved.