A buyer and seller in California have agreed to the sale of a residential property. The buyer's agent sends the fully executed purchase agreement to the escrow company. Under California law, when does the contract become binding on both parties?
Correct Answer
B) When both parties have signed the agreement and acceptance has been communicated
Under California Civil Code §1583, consent is not mutual until acceptance is communicated to the offeror. A California real estate contract becomes binding when both parties have signed and the acceptance has been communicated to the offering party or their agent.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Contracts Question
Background Knowledge for Contracts
Real World Application in Contracts
Related Topics & Key Terms
Key Terms:
More Contracts Questions
An offer to purchase real estate is terminated by all of the following EXCEPT:
Kansas REALTORS provides:
Johnny purchases a house, doesn't want furniture left behind. He signs Tuesday, changes mind Thursday, calls agent to add furniture to contract. What is this?
Which of the following is required for a valid contract in California?
Alaska REALTORS provides:
- → Earnest money in Kansas must be:
- → A buyer seeks specific performance after a seller defaults on an Illinois residential purchase contract. Which statement most accurately describes how Illinois courts treat specific performance as a remedy in real estate disputes?
- → Kansas requires disclosure of:
- → An Illinois purchase contract states that upon mutual release, the earnest money of $15,000.00 will be divided with the seller receiving 60% and the buyer receiving the remaining 40%. The seller's share would also be subject to a $500.00 administrative processing fee deducted from the seller's portion before disbursement. How much would the seller net after the processing fee?
- → An Illinois exam-prep workbook gives this calculation. Quinn Bennett signed an Illinois purchase contract in Bloomington for $610,000.00. The contract requires earnest money equal to 1.0% of the price, and the parties later sign a release allowing the seller to keep the earnest money as liquidated damages. How much earnest money is involved?
- → Vermont closings typically involve:
- → In June 2026, Riley Monroe receives a counteroffer and asks what generally happens to the original offer. What is the most accurate answer under current Illinois rules?
- → Pennsylvania's Real Estate Recovery Fund provides:
- → Earnest money (down payment) in NY is typically held by:
- → Oregon carbon monoxide alarm requirements:
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Previous Question
A California real estate licensee is advising a client on what must be included in a valid real estate purchase contract. Under California law, all of the following are required elements of a valid contract EXCEPT:
Next Question
A seller cancels a 6-month exclusive listing agreement with a California broker after only 2 months. Which of the following BEST describes the seller's legal obligation?