Contracts
What makes an offer to purchase a Hawaii property a valid, enforceable contract when accepted?
AA. Only the price and property address are needed for a valid contract
BB. A valid contract requires offer, acceptance, consideration, legal purpose, and competent parties—all standard contract elements must be present✓ Correct
CC. A real estate contract is only valid if witnessed by two people in Hawaii
DD. Only contracts above $100,000 require all contract elements to be present
Explanation
A valid real estate contract requires: (1) offer (one party's proposal), (2) acceptance (unqualified agreement to the offer), (3) consideration (something of value exchanged—money, the deed, promises), (4) legal purpose (not for illegal activity), and (5) competent parties (legal age, mental capacity). Hawaii also requires real estate contracts to be in writing.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
State-Specific Concepts
DRE Regulation
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