ContractsIntermediateArizona Exam

A real estate contract that is 'voidable' means:

AThe contract is invalid and has no legal effect from its inception

BThe contract is valid but may be cancelled by one party due to a legal defectCorrect

CThe contract must be approved by a court to be valid

DBoth parties must agree to cancel the contract

Why The contract is valid but may be cancelled by one party due to a legal defect Is Correct

Answer B: The contract is valid but may be cancelled by one party due to a legal defect

A voidable contract is valid and enforceable but may be cancelled (voided) by one of the parties — typically the party who was subject to fraud, duress, undue influence, or lack of capacity.

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.

People Also Study

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.

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

Purchase Agreement

A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.

Option Contract

A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

Study This Topic

Real Estate Contracts Guide

Practice More Arizona Real Estate Questions

1,400+ questions covering all exam topics. Start free — no signup required.

Take the Free Arizona Quiz →