ContractsIntermediateNorth Carolina Exam

A NC contract for the sale of commercial real estate that is not in writing but is partially performed (e.g., buyer has taken possession and made improvements) may be:

AVoid under the Statute of Frauds with no exceptions, which reflects common industry practice

BEnforceable under the doctrine of part performance as an exception to the Statute of FraudsCorrect

CBinding only for the term of possession

DEnforceable only if witnessed by two parties

Why Enforceable under the doctrine of part performance as an exception to the Statute of Frauds Is Correct

Answer B: Enforceable under the doctrine of part performance as an exception to the Statute of Frauds

The doctrine of part performance is a recognized exception to the Statute of Frauds in NC — when a party has taken possession, paid consideration, and made improvements in reliance on an oral contract, courts may enforce the oral agreement.

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.

Earnest Money

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

Contingency

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

Listing Agreement

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

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