ContractsIntermediateNorth Carolina Exam

Under NC law, if a seller dies after signing a purchase contract but before closing, the contract:

AIs automatically voided by the seller's death

BRemains binding on the seller's estate, which must complete the sale per contract termsCorrect

CAutomatically extends the closing date by 90 days

DGives the buyer the right to renegotiate all terms, as is customary in this jurisdiction

Why Remains binding on the seller's estate, which must complete the sale per contract terms Is Correct

Answer B: Remains binding on the seller's estate, which must complete the sale per contract terms

A valid purchase contract survives the death of a party — it becomes binding on the deceased seller's estate, which must fulfill the contract obligations or be subject to breach of contract claims.

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

Contingency

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

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.

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.

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