Mark agrees to buy Jennifer's Florida home for $350,000. The contract states that Mark will pay $1,000 earnest money, but he never actually deposits it. Jennifer later tries to cancel the contract claiming failure of consideration. What is the likely outcome?
Correct Answer
C) The contract remains valid and enforceable
Correct: C - In Florida, the promise to pay earnest money is sufficient consideration; actual payment isn't required for contract validity. The promise to buy and sell at the stated price constitutes consideration. Why not A: Non-payment of earnest money is a breach but doesn't invalidate the contract. Why not B: The mutual promises to buy and sell are adequate consideration. Why not D: While Jennifer might have remedies for breach, the contract remains valid.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Real Estate Contracts Question
Background Knowledge for Real Estate Contracts
Real World Application in Real Estate Contracts
Common Mistakes to Avoid on Real Estate Contracts Questions
Related Topics & Key Terms
Key Terms:
More Real Estate Contracts Questions
A buyer and seller in Florida agree to a purchase price of $300,000 with the buyer assuming the seller's existing mortgage. The contract must include which specific disclosure?
All of the following are required elements of a valid Florida real estate purchase contract EXCEPT:
A seller accepts a buyer's offer on their Florida home but dies before closing. The seller's estate representative wants to cancel the contract. What is the legal status?
The effective date of a Florida real estate contract is:
The FAR/BAR residential contract requires earnest money held by:
- → In Florida, the inspection period is typically:
- → A buyer signs a Florida purchase contract for a condo and learns during the inspection period about a special assessment of $10,000. The seller knew but didn't disclose this. What are the buyer's rights?
- → A buyer and seller in Florida agree to extend the closing date by 10 days. The original contract had a 'time is of the essence' clause. What must they do to make this extension valid?
- → In Florida real estate contracts, what legal principle requires that both parties exchange something of value?
- → A Florida real estate licensee prepares a purchase agreement that includes a financing contingency. The buyer fails to apply for financing within the specified timeframe. What is the legal consequence under Florida contract law?
- → Under Florida law, all of the following would typically survive the closing of a real estate purchase agreement EXCEPT:
- → A Florida purchase contract includes an appraisal contingency stating the property must appraise for at least the purchase price of $350,000. The appraisal comes in at $340,000. What options does the buyer have?
- → A Florida real estate purchase contract includes a financing contingency requiring loan approval within 30 days. On day 28, the buyer hasn't received approval but hasn't notified the seller. What is the buyer's status?
- → In a Florida real estate transaction, the purchase agreement includes a mortgage contingency clause. The buyer receives a loan commitment letter with an interest rate 0.5% higher than specified in the contract. What are the buyer's rights?
- → A Florida real estate broker prepares a purchase agreement that incorrectly states the lot size as 15,000 sq ft when it's actually 12,000 sq ft. The error is discovered after contract execution but before closing. What is the buyer's most likely remedy?
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 buyer submits an offer on a Florida property with an expiration time of 5:00 PM Friday. At 4:45 PM Friday, the seller's agent calls to say the seller accepts. At 4:55 PM, before receiving the signed acceptance, the buyer calls to revoke the offer. The signed acceptance arrives at 5:10 PM. Is there a binding contract?
Next Question
Two Florida real estate brokers verbally agree that Broker A will pay Broker B a 25% referral fee for a commercial transaction. Broker B refers a client who purchases a $2 million property. When Broker A refuses to pay the referral fee, claiming no written agreement exists, what is Broker B's legal position under Florida law?