Leasing License Practice Exam

What is the only contract that must be in writing?

1. Lease contracts

2. Exclusive contracts

3. Implied contracts

4. Bilateral contracts

The correct answer is: Exclusive contracts

The correct answer highlights the significance of exclusive contracts within the context of real estate and leasing. Exclusive contracts, particularly exclusive agency or exclusive right-to-sell agreements, are legally binding agreements that necessitate formal documentation to protect the interests of all parties involved. Such contracts define a specific and exclusive relationship between a principal and an agent, stipulating terms and conditions that govern their interactions. Written agreements are essential for exclusive contracts as they provide clarity and prevent disputes regarding the obligations and expectations of both parties. This written form often includes details such as the scope of services, commission structures, and duration of the agreement, which are critical components that help in maintaining a clear understanding of the contractual arrangement. In contrast, lease contracts can sometimes be verbal if they are for a term shorter than one year, depending on local laws. Implied contracts arise from actions or conduct rather than a written agreement, and bilateral contracts can exist in either written or oral form. Thus, the necessity of written documentation is uniquely pertinent to exclusive contracts, establishing a formal basis for the exclusive relationship and ensuring enforceability.