Contracts
What is 'consideration' in a Pennsylvania real estate contract and why is it essential?
AThe due diligence period during which a buyer considers their purchase decision
BSomething of value exchanged by each party that makes the contract legally binding — in real estate, typically the purchase price from the buyer and the promise to convey title from the seller✓ Correct
CThe process of reviewing a commercial lease before execution
DThe buyer's payment of the home inspection fee before contract execution
Explanation
Consideration is one of the essential elements of a valid contract — each party must give something of legal value to support the other's promise. In a Pennsylvania real estate purchase contract, the buyer's consideration is the purchase price (and earnest money) and the seller's consideration is the promise to convey marketable title.
People Also Study
Related Pennsylvania Questions
- Under Pennsylvania contract law, earnest money deposited with a broker must be placed in an escrow account within:Contracts
- Pennsylvania's Uniform Written Obligations Act requires that for a promise without consideration to be enforceable:Contracts
- In Pennsylvania, within how many days must a broker deposit earnest money into their escrow account?Pennsylvania License Law
- Under Pennsylvania law, earnest money deposited by a buyer is:Contracts
- In a real estate contract, 'earnest money' serves as:Contracts
- A marketable title in Pennsylvania means:Escrow & Title
- In Pennsylvania, earnest money deposited with a broker must be held in:Escrow & Title
- A Pennsylvania deed must include which essential element to be valid?Escrow & Title
Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Math Concepts
Study This Topic
Practice More Pennsylvania Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Pennsylvania Quiz →