Indiana Real Estate Broker Exam — All Questions
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Under which legal doctrine must a contract for the sale of real estate be in writing to be enforceable?
- a.The parol evidence rule
- b.The statute of frauds✓
- c.The doctrine of laches
- d.The statute of limitations
The statute of frauds requires certain contracts, including those for the sale of an interest in real estate, to be in writing and signed to be enforceable. The parol evidence rule limits use of outside evidence to change a written contract, and laches concerns unreasonable delay in asserting a right.
A seller receives a buyer's offer and responds by changing the closing date and price. The seller's response is best described as a(n):
- a.Counteroffer that terminates the original offer✓
- b.Acceptance that forms a binding contract
- c.Option to purchase
- d.Novation of the contract
Changing any material term of an offer creates a counteroffer, which rejects and terminates the original offer. The original offeror (the buyer) is then free to accept, reject, or counter again. Only an unqualified acceptance of all terms forms a binding contract.
An agreement that gives a prospective buyer the right, but not the obligation, to purchase a property at a set price within a stated period in exchange for consideration is a(n):
- a.Option contract✓
- b.Assignment
- c.Exclusive listing
- d.Land contract
An option is a unilateral contract in which the optionor (owner) gives the optionee the right to buy within a set time for agreed consideration. The optionee may choose whether to exercise the option; the owner is bound to sell only if the option is exercised.