New Jersey Real Estate License Exam Practice Question
A buyer and seller agreed upon a selling price for a property and both signed a written agreement. As part of the contract, the buyer reserved the right to cancel the sale if the buyer's house, which was on the market, did not sell within 30 days. This contract is:
Correct Answer: C
Rationale: The scenario describes an executory contract, where both parties have obligations that are yet to be fulfilled. The buyer must sell their house, and the seller must transfer ownership of the property upon completion of that sale.
Option A, an executed contract, refers to agreements where all terms have been fulfilled, which is not the case here.
Option B, a unilateral contract, involves one party making a promise contingent on the action of another, but both parties have commitments in this situation.
Option D, an implied contract, arises from actions rather than written agreements, which does not apply here as a formal written contract exists.
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