Connecticut Real Estate Contracts: What's on the Exam

Contract law is a core topic on the Connecticut real estate exam, appearing in both the national and state sections. Here's what you need to know to answer contract questions confidently.

Essential Elements of a Valid Contract

Every valid real estate contract in Connecticut requires:

1. Offer and Acceptance (Mutual Assent) — Both parties must agree to the same terms
2. Consideration — Something of value exchanged (typically the purchase price and earnest money)
3. Legally Competent Parties — Both parties must be of legal age (18+) and mentally competent
4. Lawful Purpose — The contract cannot require illegal acts
5. In Writing — Under the Statute of Frauds, real estate contracts must be in writing to be enforceable in Connecticut

Void vs. Voidable Contracts

Void contract: Has no legal effect from the beginning. Example: a contract with an illegal purpose.

Voidable contract: Valid and enforceable unless one party chooses to void it. Example: a contract signed by a minor (the minor can void it; the adult cannot).

Unenforceable contract: May be valid between the parties but cannot be enforced in court. Example: an oral contract for the sale of real estate (violates the Statute of Frauds).

The Purchase and Sale Agreement

In Connecticut, the main contract for the sale of real property is the Purchase and Sale Agreement (sometimes called a "Contract of Sale"). Key provisions include:

• Identification of parties (buyer and seller)
• Legal description of the property
• Purchase price and earnest money amount
• Financing contingency (if buyer needs a mortgage)
• Inspection contingency (buyer's right to inspect)
• Closing date
• Possession date
• Condition of property at closing

Common Contingencies

Financing Contingency: Allows the buyer to back out if they cannot obtain a mortgage at specified terms. This protects the buyer — not the seller.

Inspection Contingency: Gives the buyer the right to inspect the property and negotiate repairs or void the contract if issues are found.

Sale Contingency: Buyer's obligation to purchase is contingent on the sale of their current home. Sellers often include a "kick-out clause" allowing them to continue marketing the property.

Appraisal Contingency: If the property appraises below the purchase price, the buyer can renegotiate or exit the contract.

Earnest Money in Connecticut

The earnest money (good faith deposit) demonstrates the buyer's serious intent. In Connecticut: - The salesperson must deliver the deposit to the broker by the next business day - The broker must deposit it into an escrow/trust account within 5 business days - If the deal closes, the deposit is typically applied toward the purchase price or closing costs - If the buyer defaults without a valid contingency, the seller may keep the deposit as liquidated damages

Breach of Contract Remedies

Seller's remedies if buyer defaults: - Keep the earnest money as liquidated damages - Sue for specific performance (force the buyer to complete the purchase) - Sue for monetary damages

Buyer's remedies if seller defaults: - Sue for specific performance (force the seller to sell) - Sue for monetary damages - Rescission (cancel the contract and recover earnest money)

Statute of Limitations

In Connecticut, the statute of limitations for written contracts is 6 years. Legal action for breach of a real estate contract must be filed within this timeframe.

For Connecticut contract practice questions and full mock exams, visit [CARealestate.com/states/connecticut](https://carealestate.com/states/connecticut).