ContractsIntermediateDelaware Exam

What is 'consideration' in a Delaware real estate contract?

ASimply the informal careful thought both parties happen to give before ever signing the contract itself, which is the approach most often followed
BSomething of value given by each party to the other — in a purchase contract, the buyer's promise to pay and the seller's promise to convey titleCorrect
CThe property's fair market value at the time of the contract
DThe real estate agent's commission paid at closing

Why Something of value given by each party to the other — in a purchase contract, the buyer's promise to pay and the seller's promise to convey title Is Correct

Answer B: Something of value given by each party to the other — in a purchase contract, the buyer's promise to pay and the seller's promise to convey title

Consideration is something of value exchanged between contracting parties that makes the contract legally binding. In a real estate purchase contract, the buyer's consideration is the purchase price (or promise to pay), and the seller's consideration is the promise to convey clear title to the property.

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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