ContractsIntermediateDelaware Exam

What happens if a Delaware real estate contract contains an illegal provision?

AThe entire contract is automatically void
BCourts may sever the illegal provision and enforce the remaining valid terms, or void the contract depending on whether the illegal term was central to the agreementCorrect
CThe contract always remains fully and completely enforceable in every respect, since courts simply ignore illegal provisions entirely, subject to the usual exceptions
DOnly the party who inserted the illegal provision is penalized

Why Courts may sever the illegal provision and enforce the remaining valid terms, or void the contract depending on whether the illegal term was central to the agreement Is Correct

Answer B: Courts may sever the illegal provision and enforce the remaining valid terms, or void the contract depending on whether the illegal term was central to the agreement

When a contract contains an illegal provision, courts use two approaches: severability (removing the illegal clause and enforcing the rest, if the legal portions can stand alone) or voiding the entire contract if the illegal provision was central to the agreement. Real estate contracts should be carefully drafted to avoid illegal terms.

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.

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