A homeowner in Fresno receives an offer to purchase his property. The prospective buyer pays the homeowner $5,000 in exchange for the homeowner's promise to keep the offer open and irrevocable for 30 days while the buyer arranges financing. Under California law, what type of agreement has been created?
Correct Answer
B) An option contract, making the offer irrevocable for the 30-day period
Under California law, an option contract is created when an offeree (here, the prospective buyer) pays separate consideration to the offeror (the homeowner/seller) in exchange for the offeror's promise to keep an offer open and irrevocable for a specified period. The $5,000 payment is the consideration that supports the option. Unlike a standard offer — which can be revoked at any time before acceptance under Civil Code §1586 — an option contract binds the seller to hold the offer open for the full 30 days.
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Under California's Statute of Frauds (Civil Code §1624), several types of agreements must be in writing to be enforceable. Which of the following agreements does NOT need to be in writing under California's Statute of Frauds?
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Elena, who is under the influence of prescription medication that impairs her judgment, signs a real estate purchase agreement in California for a home priced at $425,000. After the medication wears off, Elena wants to void the contract. Under California Civil Code §39, what is Elena's BEST legal argument?