Contracts
In Michigan, the parol evidence rule prevents:
AVerbal agreements between real estate agents
BIntroduction of prior oral or written agreements that contradict a final written contract✓ Correct
CBuyers from negotiating price after signing
DBrokers from modifying listing agreements
Explanation
The parol evidence rule prevents a party from introducing prior or contemporaneous oral statements to contradict or vary the terms of a fully integrated written contract.
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Key Terms to Know
Listing Agreement
A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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