Contracts, Transfer, and Escrow Practice Question
Question
A buyer and seller disagree about a transaction term involving escrow instructions. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 113)
Answer choices
- A. Recognize neutral third-party handling of documents and funds under instructions.
- B. It is primarily a tax rule with no effect on brokerage practice.
- C. It removes the need for written disclosure if the licensee believes the client already knows.
- D. It can be ignored if the transaction is expected to close quickly.
Correct Answer
A. Recognize neutral third-party handling of documents and funds under instructions.
Explanation
The correct answer is A because escrow instructions requires candidates to recognize neutral third-party handling of documents and funds under instructions. 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: escrow instructions