What is the legal effect when a buyer and seller sign a purchase agreement?
Why A binding executory contract is created Is Correct
Answer B: A binding executory contract is created
Exam Tip: Contracts
Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.
Key Contracts Terms in This Question
People Also Study
Related Alaska Questions
- Under the Alaska Uniform Vendor and Purchaser Risk Act, if a property is materially damaged after the purchase agreement is signed but before closing, the risk of loss falls on:Contracts
- When a buyer and seller have signed a purchase agreement, the contract is classified as:Contracts
- When a buyer fails to perform under a purchase agreement without legal excuse, the seller may retain the earnest money as:Contracts
- An Alaska purchase agreement states that the buyer's offer will expire at 5:00 PM on Friday. The seller signs the acceptance at 4:45 PM on Friday but it is not emailed to the buyer until 5:30 PM. The contract is most likely:Contracts
Key Terms to Know
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Earnest MoneyA 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.
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.
Math Concepts
Study This Topic
Practice More Alaska Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →