New Jersey Real Estate Exam Practice Question
A potential buyer signs a contract with a seller but then decides not to buy. The seller may sue the potential buyer for specific performance or damages unless the contract was
Correct Answer: D
Rationale: In contract law, an option contract grants the buyer the exclusive right to purchase a property within a specified timeframe, but it does not obligate them to do so. Thus, if the buyer chooses not to proceed, the seller has limited recourse.
A bilateral contract (A) involves mutual obligations, making the buyer liable for breach. An installment contract (B) requires payments over time, also creating obligations. A land contract (C) typically binds the buyer to complete the purchase. In contrast, an option contract allows the buyer to walk away without penalty, protecting their right not to perform.
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