ContractsIntermediateArizona Exam

In Arizona, an 'offer to purchase' is defined as:

AA legally binding contract that becomes effective the moment the buyer signs, regardless of whether the seller has acknowledged or responded to the terms
BA proposal by the buyer setting forth the terms under which they are willing to purchase, subject to seller acceptanceCorrect
CA preliminary agreement that becomes binding only after the buyer's lender issues a pre-approval letter confirming the buyer's ability to close the transaction
DA document that creates joint obligations on both parties once signed; the seller's acceptance is presumed unless the seller objects in writing within 24 hours

Why A proposal by the buyer setting forth the terms under which they are willing to purchase, subject to seller acceptance Is Correct

Answer B: A proposal by the buyer setting forth the terms under which they are willing to purchase, subject to seller acceptance

An offer to purchase is a proposal—not yet binding—setting out the buyer's proposed terms. It becomes a binding contract only when the seller accepts all terms and communicates the acceptance to the buyer.

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

Pre-Approval

A lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.

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