Arizona Real Estate License Contracts and Contract Law 2 — Questions and Answers
Question 1: In Arizona, a real estate purchase contract must be in writing to be enforceable because of which legal doctrine?
- Statute of Frauds (Correct answer)
- Doctrine of Laches
- Parol Evidence Rule
- Statute of Limitations
Correct answer: Statute of Frauds
The Statute of Frauds requires contracts for the sale of real property to be in writing and signed to be enforceable.
Question 2: What is the term for a contract in which only one party makes an enforceable promise?
- Bilateral contract
- Unilateral contract (Correct answer)
- Executed contract
- Implied contract
Correct answer: Unilateral contract
A unilateral contract involves a promise by only one party that is accepted through the performance of the other party.
Question 3: A buyer signs a purchase offer but dies before the seller accepts it. What is the status of the offer?
- The offer is automatically accepted
- The offer terminates (Correct answer)
- The estate must complete the purchase
- The offer becomes a counteroffer
Correct answer: The offer terminates
The death of the offeror before acceptance terminates the offer automatically.
Question 4: Which element is NOT required for a valid real estate contract in Arizona?
- Legal purpose
- Consideration
- Notarization of both parties' signatures (Correct answer)
- Mutual assent
Correct answer: Notarization of both parties' signatures
Notarization is not required to form a valid purchase contract, though offer, acceptance, consideration, capacity, and legal purpose are.
Question 5: When an offeree responds to an offer by changing the price, this response is legally considered a:
- Valid acceptance
- Counteroffer (Correct answer)
- Ratification
- Novation
Correct answer: Counteroffer
Any material change to the terms constitutes a counteroffer, which rejects the original offer.
Question 6: A contract entered into by a person legally declared mentally incompetent is generally:
- Valid and enforceable
- Void (Correct answer)
- Voidable at the seller's option only
- Automatically ratified
Correct answer: Void
A contract made by a person adjudicated mentally incompetent is void because that person lacks legal capacity.
Question 7: In Arizona, an 'as-is' clause in a purchase contract primarily relieves the seller from:
- The duty to disclose known material defects
- Making repairs to the property (Correct answer)
- Transferring clear title
- Paying property taxes owed
Correct answer: Making repairs to the property
An as-is clause means the seller need not make repairs, but it does not eliminate the legal duty to disclose known material defects.
Arizona Real Estate License Contracts and Contract Law 2
In Arizona, a real estate purchase contract must be in writing to be enforceable because of which legal doctrine?