California Real Estate Practice Exam

A contract of sale to an investor is conditioned upon the new prospective owner finding tenants for his building in advance. This agreement is:

1. enforceable

2. unenforceable

3. unreal

4. void because it violates the statute of frauds

The correct answer is: enforceable

The agreement is enforceable because it sets specific conditions that must be met before the sale is finalized. In this case, conditioning the sale on the prospective owner finding tenants is a legitimate term of the contract. As long as the conditions are clearly defined and are not against public policy or illegal, such stipulations can be part of an enforceable contract. The other options do not accurately reflect the nature of the agreement. It is not unenforceable because there is a clear condition. It is also not unreal, as it represents a genuine agreement between parties concerning property sales. Lastly, it does not void the statute of frauds, which typically requires certain types of agreements to be in writing; the condition here does not invalidate the contract overall. The key aspect is that the parties have a clear understanding of their obligations, making the contract enforceable.