Contracts
In South Dakota, a bilateral contract is one in which:
AOnly one party makes a promise
BBoth parties exchange promises to perform✓ Correct
CThe government and a private party are both involved
DTwo brokers from different firms cooperate on a sale
Explanation
A bilateral contract involves an exchange of promises — each party promises to perform. Most real estate purchase agreements are bilateral contracts (seller promises to sell; buyer promises to buy).
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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 MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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.
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