ContractsIntermediateDelaware Exam

What is 'recession' in Delaware real estate contract law (right of rescission)?

AAn economic downturn affecting real estate markets

BThe right of a party to cancel or undo a contract — returning both parties to their pre-contract positionsCorrect

CSimply the seller's own unilateral right to reduce the listing price at will during the listing period, in general

DA buyer's right to request repairs after closing

Why The right of a party to cancel or undo a contract — returning both parties to their pre-contract positions Is Correct

Answer B: The right of a party to cancel or undo a contract — returning both parties to their pre-contract positions

Rescission cancels a contract and returns both parties to their original positions. TILA provides a mandatory 3-business-day right of rescission for non-purchase refinances and HELOCs on a borrower's primary residence — the borrower can cancel after signing.

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.

People Also Study

Key Terms to Know

Option Contract

A contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

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.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

Study This Topic

Real Estate Contracts Guide

Practice More Delaware Real Estate Questions

1,500+ questions covering all exam topics. Start free — no signup required.

Take the Free Delaware Quiz →