BC Real Estate Trading Services Course Contract Law

Question 1

What are the essential elements required for a valid real estate contract in BC?

Accepted Answer

Offer, acceptance, consideration, capacity, legality, and genuine consent

Answer

Only a written document and signatures

Answer

A real estate agent's involvement and a signed listing agreement

Answer

A property inspection and mortgage pre-approval

Question 2

Under the BC Law and Equity Act, what is required for a real estate contract to be enforceable?

Accepted Answer

It must be in writing and signed by the party to be charged, as required by the Statute of Frauds provision

Answer

It must be notarized by a lawyer

Answer

It must be witnessed by two people

Answer

It must be registered at the Land Title Office

Question 3

What is a 'subject clause' in a BC real estate contract?

Accepted Answer

A condition that must be satisfied before the contract becomes binding, such as 'subject to financing' or 'subject to inspection'

Answer

A clause that describes the property being sold

Answer

A clause requiring the seller to make repairs

Answer

A clause that determines the commission rate

Question 4

What happens if a buyer fails to complete a real estate purchase in BC after removing all subjects?

Accepted Answer

The seller may keep the deposit and potentially sue for damages, including the difference between the contract price and the eventual sale price

Answer

Nothing — the buyer can walk away at any time

Answer

The buyer only loses their deposit and has no further liability

Answer

The transaction is automatically extended by 30 days

Question 5

What is the 'doctrine of misrepresentation' and how does it apply to BC real estate?

Accepted Answer

A false statement of fact made by one party that induces the other to enter a contract, which may entitle the misled party to rescission or damages

Answer

It only applies to verbal statements, not written ones

Answer

It is a marketing strategy used by real estate agents

Answer

It only applies if the misrepresentation was intentional

Question 6

What is an 'assignment' of a real estate contract in BC?

Accepted Answer

The transfer of a buyer's rights and obligations under a contract to a third party before completion

Answer

Cancelling a contract and starting a new one

Answer

Changing the closing date of a transaction

Answer

Adding additional subjects to an existing contract