BC Real Estate Trading Services Course Law of Contracts 2

Question 1

For a real estate contract to be legally enforceable in BC, which of the following is NOT a required element?

Accepted Answer

Witnessed signatures from both parties

Answer

Offer and acceptance

Answer

Consideration

Answer

Capacity of the parties

Question 2

A buyer submits an offer with conditions to be removed within 7 days. Before the conditions are removed, this contract is best described as:

Accepted Answer

A conditional contract — binding on both parties but subject to the conditions being satisfied

Answer

Void — no contract exists until conditions are met

Answer

Voidable at the seller's option

Answer

An option agreement giving the buyer the right to buy

Question 3

In BC, a real estate contract that is 'voidable' means:

Accepted Answer

One party has the right to rescind (cancel) the contract, but it remains valid unless they exercise that right

Answer

The contract has no legal effect from the time it was created

Answer

Both parties can terminate the contract at any time without penalty

Answer

The contract will automatically become void after 30 days

Question 4

When is 'time is of the essence' relevant in a BC real estate purchase contract?

Accepted Answer

It makes specified deadlines strict — missing a deadline can result in the party being in default and losing their rights under the contract

Answer

It means each party has 30 days to respond to any notice

Answer

It refers to the timeline for the home inspection only

Answer

It prevents either party from requesting an extension of closing

Question 5

A counteroffer by the seller to a buyer's initial offer has which legal effect?

Accepted Answer

It rejects the original offer and creates a new offer from the seller to the buyer

Answer

It extends the time for the buyer to accept the original offer

Answer

It automatically modifies the original offer without creating a new contract

Answer

It requires the buyer to accept all changes without further negotiation

Question 6

Under BC's Property Transfer Tax Act, which statement about PTT (Property Transfer Tax) is CORRECT?

Accepted Answer

PTT is a tax payable by the buyer based on the fair market value of the property being transferred

Answer

PTT is paid by the seller as part of their closing costs

Answer

PTT only applies to commercial property transactions

Answer

PTT is capped at a maximum of $5,000 regardless of the purchase price