ContractsIntermediateCalifornia Exam

What is a 'land contract' (contract of sale or installment sale contract)?

AA contract for the sale of agricultural land only, under standard California purchase contract terms
BA financing arrangement where the seller retains title until the buyer completes all paymentsCorrect
CA contract between a builder and the city for land use, as typically drafted in a residential purchase agreement
DA contract to survey and map a parcel, consistent with common contract law principles

Why A financing arrangement where the seller retains title until the buyer completes all payments Is Correct

Answer B: A financing arrangement where the seller retains title until the buyer completes all payments

In a land contract (also called a contract for deed or installment sale), the seller retains legal title while the buyer takes possession and makes payments over time. Title only transfers to the buyer upon full payment.

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

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