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Maryland Contracts (alternative)
Practice Questions & Answers (2026)

Contract law questions on the Maryland real estate exam test both general contract principles and Maryland-specific transaction requirements. The Maryland Real Estate Commission tests how Maryland contract law applies to purchase agreements, counteroffers, contingencies, and earnest money disputes. Pay close attention to offer and acceptance mechanics, how counteroffers extinguish prior offers, and the specific timelines under Maryland law for earnest money handling and contingency resolution. These are areas where candidates who studied nationally often apply the right concept but the wrong MD-specific timeframe or rule.

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Updated May 2026 · Maryland Real Estate Commission exam outline

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Maryland Contracts (alternative) — Practice Questions & Answers

74 questions on Contracts (alternative) from the Maryland real estate question bank. First 10 are free — sign up to unlock all 74.

Q1. In Maryland, a novation in a real estate contract occurs when:

A.A new contingency is added to the original contract
B.A new party is substituted for one of the original parties with the consent of all parties
C.The contract price is reduced
D.The earnest money is refunded

Explanation

Novation occurs when all parties agree to release one original party and substitute a new party, with the new party assuming all obligations and rights under the contract.

Q2. In Maryland, an assignment of a real estate contract means:

A.The contract is cancelled and a new one is written
B.One party transfers their contractual rights (but not necessarily obligations) to a third party
C.The property is assigned a new tax account number
D.The listing agent assigns the buyer to another agent

Explanation

Assignment transfers one party's contractual rights to a third party. The original party may still be liable for obligations unless there is a novation releasing them.

Q3. In Maryland, when a buyer terminates a contract within a statutory rescission period (such as for a condo purchase), they are entitled to:

A.The difference between the contract price and current market value
B.A full refund of any deposits paid
C.Only a credit toward a future purchase
D.Compensation from the seller for inconvenience

Explanation

When a Maryland condo buyer exercises their statutory right of rescission within the allowed period, they are entitled to a full refund of all deposits paid.

Q4. A Maryland buyer's agent who submits an offer electronically has satisfied the contract's requirement for a written agreement if:

A.Only if a physical ink signature follows
B.Electronic signatures are valid under Maryland's version of the Uniform Electronic Transactions Act (UETA)
C.Only if the seller agrees to electronic documents
D.Only for offers under $100,000

Explanation

Maryland has adopted the UETA, making electronic signatures and documents legally enforceable in real estate transactions when both parties consent to electronic transactions.

Q5. A Maryland new construction contract typically includes a specification sheet that:

A.Is a separate document and does not become part of the contract
B.Becomes part of the contract and details the materials, finishes, and features to be included
C.Is only used by the builder and not shared with the buyer
D.Is prepared by MREC to standardize new home sales

Explanation

A new construction specification sheet details exactly what materials, brands, colors, and features are included in the home. It is incorporated by reference into the contract and is legally binding.

Q6. In Maryland, a builder's warranty typically covers new construction against defects for what minimum period?

A.1 year for all defects
B.1 year for workmanship, 2 years for mechanical systems, 10 years for structural defects under the new home warranty
C.5 years for all defects
D.Only 90 days for cosmetic issues

Explanation

Maryland's implied warranty of quality for new construction typically covers workmanship defects for 1 year, mechanical systems for 2 years, and structural defects for 10 years.

Q7. A Maryland buyer who cannot attend the settlement may:

A.Send their real estate agent to sign on their behalf without any legal authorization
B.Execute a Power of Attorney authorizing another person to sign closing documents on their behalf
C.Mail the closing documents to the title company
D.Delay settlement indefinitely without penalty

Explanation

A buyer who cannot attend settlement may execute a valid Power of Attorney (POA) authorizing an attorney-in-fact to sign closing documents. Lenders typically require advance approval of the POA.

Q8. In Maryland, a 'right of first refusal' in a lease is triggered when:

A.The tenant pays rent late
B.The landlord receives and intends to accept a bona fide third-party offer to purchase
C.The lease is set to expire
D.The landlord decides to sell the property

Explanation

A right of first refusal is triggered when the landlord/owner has an actual offer from a third party they are inclined to accept. The holder of the right then has the option to match that offer within the specified time.

Q9. Under Maryland law, a listing agreement that has no stated expiration date is:

A.A perpetual agreement
B.Generally unenforceable or terminable at will after a reasonable time
C.Valid for exactly 6 months by statute
D.Extended automatically for one year

Explanation

A listing agreement without a definite termination date is problematic in Maryland. Courts may treat it as terminable at will, and MREC's ethical rules require listing agreements to include a definite expiration date.

Q10. In Maryland, a buyer who makes an offer 'subject to attorney review' is providing:

A.An unconditional binding offer
B.An offer that is not binding until the buyer's attorney reviews and approves it within a specified period
C.An offer that requires MREC review
D.An offer that automatically expires in 3 days

Explanation

An attorney review contingency makes the contract contingent on the buyer's (or seller's) attorney reviewing and approving the agreement within a specified period, allowing the attorney to request modifications.

Q11. In Maryland, 'earnest money' serves primarily as:

A.The broker's commission advance
B.Evidence of the buyer's good faith and financial ability to perform
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Maryland License LawAgencyContractsFinanceProperty OwnershipProperty ValuationFair HousingEscrow & TitleReal Estate MathEnvironmentalLand Use & ZoningProperty ManagementEnvironmental (alternative)Land Use & Zoning (alternative)Property Management (alternative)Maryland License Law (alternative)Agency (alternative)Finance (alternative)Property Ownership (alternative)Property Valuation (alternative)Real Estate Math (alternative)Fair Housing (alternative)Escrow & Title (alternative)
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