South Carolina Real Estate Salesperson Exam — All Questions
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Which of the following is NOT one of the essential elements required for a valid contract?
- a.Offer and acceptance (mutual assent)
- b.Notarization of the parties' signatures✓
- c.Consideration
- d.Legal capacity of the parties
A valid contract requires mutual assent (offer and acceptance), consideration, legal capacity of the parties, lawful object, and (for real estate) usually a writing. Notarization is not an element of validity; it is only an authentication used for recording certain documents such as deeds. The other three choices are all genuine essential elements.
A seller receives an offer and responds by changing the closing date and raising the price before signing. This response is legally best described as a:
- a.Valid acceptance
- b.Option
- c.Novation
- d.Counteroffer✓
Any change to the material terms of an offer is a counteroffer, which rejects the original offer and creates a new offer that the other party may accept or reject. It is not an acceptance because acceptance must mirror the offer exactly. An option is a separate contract giving a right to buy within a set time. A novation is the substitution of a new contract or party for an existing one.
The legal doctrine that requires contracts for the sale of real estate to be in writing to be enforceable is called the:
- a.Statute of frauds✓
- b.Statute of limitations
- c.Doctrine of laches
- d.Parol evidence rule
The statute of frauds requires certain contracts, including those for the sale of real property, to be in writing and signed to be enforceable. The statute of limitations sets the time limit for filing a lawsuit. Laches bars a claim due to unreasonable delay that prejudices the other party. The parol evidence rule limits the use of outside evidence to contradict a written contract.
A buyer and seller sign a purchase agreement, but before closing the seller changes his mind and refuses to convey title. The buyer sues to force the seller to complete the sale. The buyer is seeking:
- a.Liquidated damages
- b.Rescission
- c.Specific performance✓
- d.A novation
Specific performance is an equitable remedy that compels a party to carry out the contract as agreed; it is available in real estate because each parcel of land is considered unique and money damages may be inadequate. Liquidated damages are a pre-agreed money amount for a breach. Rescission cancels the contract and returns the parties to their prior positions. A novation replaces the contract, which is not what the buyer wants.
A contract signed by a 15-year-old minor to purchase real estate is generally considered:
- a.Void from the start
- b.Voidable by the minor✓
- c.Fully enforceable against both parties
- d.Illegal
A contract made by a minor is voidable at the minor's option because minors lack full legal capacity; the minor may disaffirm it, but the adult party is bound unless the minor chooses to cancel. It is not void from the start (that describes contracts with an illegal purpose or missing an essential element), it is not fully enforceable against the minor, and buying real estate is a lawful object, so it is not illegal.