Maine Real Estate Contracts: Exam Study Guide

Maine Real Estate Contracts: Exam Study Guide

Contracts are the single largest topic on the national section of the Maine real estate exam — approximately 17% of questions. You'll also see contract-related questions in the state section, particularly around Maine disclosure requirements and buyer agency agreements.

Elements of a Valid Real Estate Contract

Every valid contract requires:

1. Offer and acceptance (mutual assent) — Both parties must agree to the same terms.
2. Consideration — Something of value exchanged (earnest money, purchase price, promises).
3. Legally competent parties — Both parties must have legal capacity (adults of sound mind, not under duress).
4. Lawful purpose — The contract cannot require illegal acts.
5. In writing — Real estate contracts must be in writing under the Statute of Frauds. Oral real estate contracts are generally unenforceable.

Types of Contracts Tested

Purchase and Sale Agreement — The primary contract between buyer and seller. Specifies price, property, contingencies, and closing date.

Listing Agreement — Contract between seller and broker. Types: exclusive right to sell (broker earns commission regardless of who sells), exclusive agency (seller can sell independently without paying commission), open listing (multiple brokers, commission only to the one who produces a buyer).

Buyer Agency Agreement — In Maine, must be in writing to establish buyer representation. Key exam point.

Option Contract — Buyer pays for the right to purchase at a set price within a set time. The seller cannot sell to anyone else during the option period. The buyer is not obligated to buy.

Right of First Refusal — Holder gets the right to match any offer before the property is sold to a third party.

Key Contract Terms

Contingency — A condition that must be met for the contract to proceed (financing contingency, inspection contingency, sale of buyer's home contingency).

Time is of the essence — When this clause is included, deadlines are absolute. Missing a deadline can constitute a breach.

Earnest money — Deposit held in escrow. If buyer defaults, seller may keep it. If seller defaults, buyer typically gets it back plus may sue for damages.

Liquidated damages — A pre-agreed amount the defaulting party pays. If the contract specifies earnest money as liquidated damages, the seller cannot sue for additional amounts.

Counteroffer — Rejects the original offer and creates a new offer. The original offer is legally dead once a counteroffer is made.

Maine-Specific Contract Rules

Written Buyer Agency Agreement — As discussed in agency law, Maine requires this in writing. Without it, the licensee is a facilitator.

Seller's Property Disclosure — Must be provided to buyers before they make an offer, or the seller can pay $500 in lieu of completing it.

Continued Education CE Hours for Contracts — Maine requires 3 CE hours specifically on contracts per renewal cycle — reflecting the importance the state places on licensees understanding contract law.

Common Exam Mistakes

• Forgetting that a counteroffer kills the original offer
• Confusing exclusive right to sell vs. exclusive agency
• Not knowing that option contracts are unilateral (only seller is bound)
• Forgetting the Statute of Frauds applies to real estate

Practice Contract Questions

[CARealestate.com/states/maine](https://carealestate.com/states/maine) has practice questions on contracts with Maine-specific context. 5 free questions — no signup needed.