Contracts
What is a Nevada real estate broker's obligation regarding a contract that contains illegal terms?
AThe broker must enforce whatever the parties agree to
BA broker must not prepare, execute, or enforce a contract with illegal terms — the broker should advise parties of the illegality and, if possible, modify the contract to make it lawful✓ Correct
CIllegal contract terms are automatically void without any broker action needed
DThe broker should submit the illegal contract to NRED for review
Explanation
Nevada real estate brokers and agents cannot participate in contracts that violate Nevada law or public policy. If illegal terms are identified, the broker must advise the parties and either modify the contract to be lawful or decline to participate. Executing an illegal contract could expose the broker to disciplinary and civil liability.
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