ContractsIntermediateCalifornia Exam

What is 'assignment' of a contract?

AMoving a property to a new location, as typically drafted in a residential purchase agreement

BTransferring one's rights or obligations under a contract to a third partyCorrect

CAssigning a DRE license to another person, consistent with common contract law principles

DThe escrow company's task list, per standard contingency and disclosure practice

Why Transferring one's rights or obligations under a contract to a third party Is Correct

Answer B: Transferring one's rights or obligations under a contract to a third party

Assignment transfers a party's rights (and sometimes obligations) under a contract to a third party. In real estate, contracts are generally assignable unless the contract expressly prohibits it.

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

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.

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

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Key Terms to Know

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

Right of First Refusal

A contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.

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.

State-Specific Concepts

DRE Regulation

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