A contract that one party may legally cancel or affirm, often due to a defect like a party's lack of capacity.
Why Voidable Contract matters on the exam
This term belongs to Contracts. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Voidable Contract
Every Freehold question shows why the right answer is right — and cites its source.
A signed purchase agreement in which the buyer's financing and inspections are still pending is best described as:
An executory contract
An executed contract
A voidable contract
An implied contract
Show answer & explanation
An executory contract — An executory contract is one in which obligations remain to be performed, such as satisfying financing and inspection contingencies before closing. Once fully performed at closing, the contract becomes executed.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
A property manager continues collecting a tenant's rent and providing services after a lease expires, with no new written lease, and the tenant keeps paying. The resulting month-to-month arrangement, formed through the parties' conduct rather than express words, is best classified as a(n):
Void contract
Unilateral contract
Implied contract
Voidable contract
Show answer & explanation
Implied contract — An implied contract arises from the conduct of the parties rather than explicit words, such as continuing to accept and pay rent after a lease term ends.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
A property owner tells a broker, 'I will pay a $5,000 commission to whoever brings me a buyer who closes on my property,' without signing an agreement with any particular broker. This is best described as an offer for a:
Unilateral contract
Bilateral contract, because both parties are bound
Implied contract, because nothing was written
Voidable contract, because there is no listing agreement
Show answer & explanation
Unilateral contract — A unilateral contract involves a promise in exchange for an act; only the owner is obligated to pay, and no broker is bound to perform until one actually produces a ready, willing, and able buyer.
Source: PSI National Real Estate Exam Content Outline §7 Contracts
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