Section 4- Sales Contract Basics

If there is room for interpretation in the contract, who will the courts rule against?

• The contract mutually dissolves

• The person benefitting from the contract

• The party who created the contract

• The licensee who looked over the contract

It's always a good idea to advise clients to review the contract with an ________ before signing it.

The licensee should determine the amount of earnest money a buyer should place as a down payment.

• False

• True

Answer explanation

It should be determined by the parties.

Licensees are able to add addenda to a contract if it doesn't cover terms needed by the party.

• False

• True

Answer explanation

Agents may fill in the blanks in a contract, but they shouldn't alter it without attorney review.

Contingencies must be removed prior to _______

What are common contingencies?

• Mortgage contingency

• Sales contingency

• Appraisal contingency

• Insurance contingency

The amount of the earnest money deposit is ultimately the ______ decision

• seller's

• lender's

• buyer's

• licensee's

When should earnest money be handed over to designated brokers?

• Immediately

• Within 1 week of receiving it

• Within 1 month of receiving it

• Within 3 business days of receiving it

The buyer's agent is responsible for describing the agreement provisions to the buyer before they sign it.

• True

• False