Contracts, Transfer, and Escrow Practice Question

Question

A property manager is preparing a written response involving valid contract. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 43)

Answer choices

1. A. It requires the licensee to favor the other party over the licensee’s own client.
2. B. It is primarily a tax rule with no effect on brokerage practice.
3. C. Distinguish valid, void, voidable, and unenforceable agreements.
4. D. It removes the need for written disclosure if the licensee believes the client already knows.

Correct Answer

C. Distinguish valid, void, voidable, and unenforceable agreements.

Explanation

The correct answer is C because valid contract requires candidates to distinguish valid, void, voidable, and unenforceable agreements. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.

Question details

• Difficulty: easy
• Domain: Contracts, Transfer, and Escrow
• Objective: valid contract

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