ContractsIntermediateNorth Carolina Exam

A 'material breach' of a NC real estate contract gives the non-breaching party the right to:

ADemand a small price adjustment only, which most practitioners would generally accept

BTreat the contract as terminated and seek damages, or pursue specific performanceCorrect

CRenegotiate minor terms only

DReport the breach to the NCREC

Why Treat the contract as terminated and seek damages, or pursue specific performance Is Correct

Answer B: Treat the contract as terminated and seek damages, or pursue specific performance

A material breach of contract allows the non-breaching party to treat the contract as terminated and pursue legal remedies including damages, return of deposits, or specific performance.

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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Key Terms to Know

Purchase Agreement

A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.

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.

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.

Earnest Money

A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.

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