Contracts, Transfer, and Escrow Practice Question

Question

A license applicant is studying a California practice scenario involving valid contract. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 63)

Answer choices

1. A. It is controlled only by local custom rather than by law, contract, or professional duty.
2. B. It is valid only when the buyer pays cash and no lender is involved.
3. C. Distinguish valid, void, voidable, and unenforceable agreements.
4. D. It prevents any later disclosure, even when new facts become known.

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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