Contracts

Contracts ### NY Real Estate Salesperson Exam — Agency & Contracts Unit Contracts questions account for roughly 8% of the exam, meaning you can expect around 6–7 questions directly on this material — questions that are almost entirely "giveable" if you master the rules below. --- ## Why Contracts Matter on the Exam Examiners love contracts because the rules are precise and testable: an element is either present or it isn't, a contract is either void or voidable, and NY has specific quirks (the Martin Act, illegal net listings, escrow rules) that separate prepared candidates from everyone else. --- ## The Five Essential Elements of a Valid Contract Every enforceable real estate contract must contain all five of the following: | Element | Plain-English Meaning | |---|---| | Offer and Acceptance | A clear, unambiguous offer by one party and a mirror-image acceptance by the other ("meeting of the minds") | | Consideration | Something of value exchanged — money, a promise to pay, a service. Earnest money is common but not the only form. | | Legally Competent Parties | Both parties must have legal capacity — adults of sound mind. Minors and those adjudicated incompetent cannot form valid contracts. | | Lawful Purpose | The contract's objective must be legal. A contract to do something illegal is automatically void. | | Consent / Mutual Assent | Free and voluntary agreement — no fraud, duress, misrepresentation, or undue influence. | Miss even one element and the contract is either void (no legal effect from the start) or voidable (valid until one party elects to cancel it). --- ## Void vs. Voidable vs. Valid - Void contract: Has no…