Contracts
Contracts define the obligations of buyers and sellers and are among the most tested topics. Licensees must understand validity, performance, and transfer of contract rights.
Validity and Enforceability
A valid contract needs mutual assent, consideration, capacity, and a lawful purpose, and real estate contracts must be written under the Statute of Frauds. A contract for an illegal purpose is void, while contracts involving minors, fraud, or duress are voidable. Knowing the difference is important.
Performance and Assignment
A 'time is of the essence' clause makes stated deadlines binding, so late performance is a breach. An assignment transfers a party's contract rights to another, while novation replaces a party or contract entirely with consent. Remedies for breach include damages, specific performance, and rescission.