Contracts & Agency – NY Real Estate Salesperson Exam

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A valid contract requires: (1) offer and acceptance (mutual assent), (2) consideration, (3) legally competent parties, and (4) lawful purpose. Real estate contracts must also be in writing to be enforceable under the Statute of Frauds.

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Contracts for the sale of real property must be in writing to be enforceable in New York. An oral contract for the sale of real estate is generally unenforceable.

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A voidable contract is one that may be affirmed or rejected at the option of one of the parties. Common examples include contracts signed by minors or those signed under duress or misrepresentation.

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A void contract has no legal effect from the beginning and cannot be enforced by either party (e.g., a contract for an illegal purpose). A voidable contract is valid but can be cancelled by one party under specific circumstances.

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Consideration is something of value exchanged between the parties that induces each to enter the contract. In real estate, it is typically money (purchase price), but it can be any benefit or detriment agreed upon by the parties.