Question 1

An attempted acceptance that changes even minor terms is labeled a counteroffer.

Accepted Answer

In contract law, an attempted acceptance that alters the terms of an offer in any way is not considered an acceptance but a counteroffer, effectively rejecting the original offer and proposing new terms.

Question 2

Misrepresentation, to be grounds for rescission, must be shown to have been fraudulent.

Accepted Answer

Misrepresentation can be grounds for rescission if it is fraudulent, negligent, or even innocent, as long as it led the other party to enter into the contract under false pretenses.

Question 3

The Interstate Land Sales Full Disclosure Act applies to all subdivision developments.

Accepted Answer

The Interstate Land Sales Full Disclosure Act applies specifically to the sale or lease of lots in subdivisions of 100 or more nonexempt lots, not to all subdivision developments.

Question 4

The ILSFDA applies only to multi-unit housing.

Accepted Answer

The Interstate Land Sales Full Disclosure Act (ILSFDA) applies to the sale of undeveloped lots in subdivisions, not just to multi-unit housing. It requires developers to register subdivisions of 100 or more non-exempt lots and provide a disclosure statement (Property Report) to potential buyers.

Question 5

The ILSFDA carries criminal penalties for violation.

Accepted Answer

The Interstate Land Sales Full Disclosure Act (ILSFDA) can carry criminal penalties for willful violations of its provisions, including fines and imprisonment.

Question 6

To deliver marketable title, the seller must deliver property to the buyer that is free from mortgages and other liens.

Accepted Answer

To deliver marketable title, the seller must ensure the property is free from encumbrances such as mortgages, liens, or any other legal claims that could affect the buyer's ownership rights.

Question 7

Conditions precedent may serve to excuse the buyer's or seller's performance under the purchase contract.

Accepted Answer

Conditions precedent are specific conditions outlined in a contract that must be met before a party is required to fulfill their contractual obligations. If these conditions are not met, they can indeed excuse the buyer's or seller's performance under the purchase contract.

Question 8

The ability of the buyer to obtain financing is generally an implied condition precedent to performance under the purchase contract.

Accepted Answer

The answer of The ability of the buyer to obtain...

Question 9

All new homes carry implied warranties for the protection of the buyer.

Accepted Answer

Implied warranties are unspoken, unwritten promises that are created by state law, ensuring that new homes meet certain standards of quality and habitability.

Question 10

An option for real estate need not be in writing to be valid.

Accepted Answer

According to the Statute of Frauds, contracts for the sale of real estate must be in writing to be enforceable.

Question 11

An option requires a seller to hold an offer open for the stated period of time and is irrevocable.

Accepted Answer

An option contract in the context of contract law indeed requires the seller (optionor) to hold an offer open for a specified period of time, during which the offer is irrevocable. This means the seller cannot sell the property or withdraw the offer within that time frame, giving the buyer (optionee) exclusive right to purchase or not purchase the property.

Question 12

An option need not have consideration to be valid.

Accepted Answer

An option contract requires consideration to be valid, as it is a promise to keep an offer open for a specified period, and consideration is necessary to make this promise enforceable.

Question 13

The delivery of marketable title is a condition precedent to performance of a contract for the sale of land.

Accepted Answer

In a contract for the sale of land, the delivery of marketable title is a condition that must be fulfilled before the seller can require the buyer to complete the purchase. This means the seller must be able to provide a title that is free from significant defects or encumbrances that would affect the value or use of the property.

Question 14

A buyer accepts when he changes only immaterial terms.

Accepted Answer

The answer of A buyer accepts when he changes only...

Question 15

A recipient of a counteroffer must accept the counteroffer upon receipt if they made the original offer.

Accepted Answer

A counteroffer effectively rejects the original offer and proposes a new offer, which the original offeror is free to accept or reject.

Question 16

Part performance is an exception to the statute of frauds requirements for land sales contracts to be in writing.

Accepted Answer

Part performance is an exception to the statute of frauds, allowing an oral contract for the sale of land to be enforced if the buyer has taken significant steps in reliance on the contract, such as making improvements to the land or taking possession.

Question 17

Misrepresentation requires proof of intent.

Accepted Answer

Misrepresentation can be either fraudulent (with intent) or innocent (without intent), so proof of intent is not always required.

Question 18

In order to establish misrepresentation, the buyer must show the statements were a material part of the decision to buy.

Accepted Answer

For a claim of misrepresentation to be successful, the buyer must demonstrate that the false statements or misrepresentations were a significant factor in their decision to proceed with the purchase. This means the misrepresented facts must have materially influenced the buyer's choice.

Question 19

A buyer's counteroffer is automatically rejected when the seller sells to someone else.

Accepted Answer

The answer of A buyer's counteroffer is automatically rejected when...

Question 20

A seller can revoke an option at any time so long as there is proper notification.

Accepted Answer

An option contract, once given in exchange for consideration, binds the seller to the terms and cannot be revoked at will before the expiration of the option period.

Quiz 13: The Purchase Contract