Arkansas Real Estate Contracts: What the Exam Tests

Contracts appear throughout Arkansas's 130-question exam in both the national and state sections.

Essential Elements

Offer and acceptance, consideration, legal capacity (18+ in Arkansas), legal purpose, in writing (Statute of Frauds).

Earnest Money in Arkansas

• Negotiated amount; typically 1-2% of purchase price
• Salesperson delivers to broker by next business day
• Broker deposits in trust account promptly
• If buyer defaults: seller may retain as liquidated damages
• If seller defaults: buyer recovers earnest money; may also seek specific performance

Residential Property Disclosure

The seller must complete the disclosure statement for 1-4 unit residential sales. If the seller fails to complete it or conceals known defects, the buyer may have grounds to rescind the contract or sue for damages.

Common Contract Scenarios

Q: A buyer and seller sign a purchase contract in Arkansas. Before closing, the seller discovers a better offer. What can the seller do? A: Accept the higher offer only by defaulting on the existing contract. The original buyer can sue for specific performance or damages.

Q: Under Arkansas law, an oral agreement to sell real estate is: A: Unenforceable under the Statute of Frauds — real estate contracts must be in writing.

Q: Specific performance is available in Arkansas real estate cases because: A: Each parcel of real estate is considered unique — money damages alone may not adequately compensate the injured party.

[Practice Arkansas contract questions at CARealestate.com/states/arkansas](https://carealestate.com/states/arkansas)