Contracts Exam Questions
Contracts is one of the highest-weighted exam topics at 12%, covering the legal requirements for valid contracts, types of real estate agreements (purchase, listing, option, lease), and remedies for breach including specific performance and liquidated damages. Nearly every real estate transaction involves multiple contracts, making this both an exam essential and a practical career necessity. Key concepts include the four elements of a valid contract, the Statute of Frauds requirement for written agreements, the distinction between void and voidable contracts, and common contingencies that create conditions precedent. Expect questions testing contract terminology, the effects of breach, and scenario-based problems involving offer, acceptance, and counteroffer sequences.
What You Need to Know About Contracts
Contracts is one of the highest-weighted exam topics and covers the legal framework for real estate agreements. Since nearly every real estate transaction involves multiple contracts, this is both an exam essential and a practical necessity for your career.
Start with the four elements required for a valid contract: competent parties (legal age, sound mind), mutual consent (offer and acceptance), legal purpose, and consideration (something of value). The Statute of Frauds requires real estate contracts to be in writing to be enforceable — this is one of the most frequently tested concepts. Know the difference between valid, void, voidable, and unenforceable contracts.
Master the key contract types: purchase agreements (bilateral, executory contracts), listing agreements (exclusive right to sell, exclusive agency, open listing), option contracts (unilateral contracts giving the right but not obligation to buy), and lease agreements. Understand contingencies (financing, inspection, appraisal) and how they create conditions that must be met. For breach remedies, know specific performance (forcing the sale), liquidated damages (keeping the earnest money), rescission (canceling the contract), and monetary damages.
- Four elements of valid contract: Competent parties, Mutual consent, Legal purpose, Consideration
- Statute of Frauds: real estate contracts MUST be in writing
- Know void (never valid) vs. voidable (can be canceled by injured party)
- Specific performance forces the sale; liquidated damages = keep earnest money
Sample Contracts Questions
200+ in bankAn 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:
Frequently Asked Questions
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