Contracts and Contract Law
Area IV is 10 of the 177 counted items: contract essentials, the statute of frauds, purchase contracts, options and rights of first refusal, and general contractual concepts.
The Arizona statute of frauds
A.R.S. 44-101 requires a signed writing for an agreement to lease for longer than one year or to sell real property or an interest in it, and adds that where an agent makes the agreement it is invalid unless the agent's authority is itself in writing. Paragraph 7 covers an agreement employing a broker to buy or sell real property for compensation, which is why a broker who wants to be paid needs a signed employment agreement. A lease of a year or less falls outside the section.
Formation and the counteroffer
A contract needs offer and acceptance, competent parties, a lawful object and consideration, plus the writing the statute of frauds demands. An acceptance must mirror the offer: a response that alters any term rejects the original offer and makes a new one, so the first offer cannot later be revived by purporting to accept it. A minor's contract is voidable at the minor's election; a contract for an unlawful purpose is void from the start.
Options, first refusal and assignment
An option binds the optionor to keep the offer open while leaving the optionee free to buy or not. A right of first refusal is pre-emptive and bites only if and when the owner decides to sell. Assigning a purchase contract transfers the assignor's rights but not the assignor's duties: without a novation releasing them, the original buyer stays liable.
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State-specific details
State exam facts
- State regulator
- Arizona Department of Real Estate (ADRE)
- Exam vendor
- Pearson VUE
- Prelicensing education
- 90 hours of ADRE-approved broker education
- Passing score
- 75%
- Scored questions
- 180
- Time limit
- 315 minutes
Who regulates real estate brokers in Arizona?
The Arizona Department of Real Estate (ADRE) licenses brokers and salespersons. ADRE contracts with Pearson VUE to deliver the licensing exams.
What experience do I need before the Arizona broker exam?
A.R.S. § 32-2124(A)(1) requires an original broker applicant to have been an active licensed real estate salesperson or broker for at least three years during the five years immediately preceding application — the statute counts active licensure, not hours worked, so there is no full-time test. The applicant must also complete a 90-classroom-hour broker course at a commissioner-certified school and pass an examination on it (§ 32-2124(C)); the 27-hour Arizona-specific portion of that course cannot be waived. Under § 32-2136 a broker management clinic consists of three courses of three hours each, and an original broker license applicant must attend one before activating the license.
How is the Arizona broker exam structured?
The Arizona broker exam is administered by Pearson VUE with 180 scored questions (plus 15 unscored pretest items) over about 5 hours 15 minutes, and a score of 75% or higher is required to pass.
Sources: https://azre.gov, https://www.pearsonvue.com/us/en/az/realestate.html
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