Contracts
Which of the following would NOT constitute adequate consideration in an Alabama real estate contract?
AMoney
BA promise to perform a service
CLove and affection (in most commercial transactions)✓ Correct
DThe exchange of mutual promises
Explanation
Love and affection (moral consideration) is generally not sufficient consideration for a commercial real estate contract, though it may be sufficient in some family transfer contexts.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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