CNE Contract Law & Agreement Drafting 2

Question 1

When a buyer submits a counteroffer in response to a seller's listed price, the legal effect is:

Accepted Answer

The original offer is rejected and replaced by the new terms

Answer

A counteroffer legally rejects the original offer and substitutes new terms; the original offeror is under no obligation to accept the counteroffer.

Question 2

What is 'specific performance' as a legal remedy in contract disputes?

Accepted Answer

A court order requiring the breaching party to fulfill the contract terms

Answer

Specific performance is an equitable remedy compelling the breaching party to perform their contractual obligations, often sought in real estate transactions because land is considered unique.

Question 3

The 'statute of frauds' requires that real estate contracts must be:

Accepted Answer

In writing and signed by the parties to be charged

Answer

The statute of frauds mandates that contracts for the sale of real property must be in writing and signed by the party against whom enforcement is sought to be legally enforceable.

Question 4

What does 'escrow' refer to in the context of a real estate transaction?

Accepted Answer

A neutral third party holding funds and documents until closing conditions are met

Answer

Escrow is a legal arrangement in which a neutral third party holds assets—such as earnest money and closing documents—on behalf of the transacting parties until all contract conditions are satisfied.

Question 5

What distinguishes a 'void' contract from a 'voidable' contract?

Accepted Answer

A void contract has no legal effect; a voidable contract is valid until a party elects to rescind it

Answer

A void contract is legally without effect from inception (e.g., illegal contracts), while a voidable contract is valid and enforceable unless the aggrieved party—such as a minor—chooses to rescind it.

(CNE) Certified Negotiation Expert Practice Test

(CNE) Certified Negotiation Expert Practice Test

CNE Contract Law & Agreement Drafting 2