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Exam topics · Tennessee

Real estate contracts on the Tennessee exam

Offer, acceptance, consideration, contingencies, and the difference between void, voidable, and unenforceable. Heavy on scenarios.

Why this section is hard

Contract questions look like reading comprehension but test precision. Void, voidable, and unenforceable are three different answers, and the exam will offer all three on the same question.

What makes a contract

Competent parties, mutual assent, lawful object, consideration, and — for real property — a writing signed by the party to be charged. Remove any one and the question is about what kind of failure resulted.

Void, voidable, unenforceable

A void contract never existed in law. A voidable contract is valid until the protected party chooses to disaffirm it. An unenforceable contract is valid between the parties but cannot be enforced by a court, usually because it is not in writing.

  • Illegal purpose or a party lacking legal capacity: void.
  • Minor, fraud, duress, undue influence, misrepresentation: voidable by the injured party.
  • Oral agreement to sell land, or one barred by the limitations period: unenforceable.

Offer and acceptance

An offer can be revoked any time before acceptance is communicated. A counteroffer terminates the original offer — the original cannot then be accepted. Acceptance must match the offer exactly, and it must be communicated back to the offeror.

Contingencies and remedies

A contingency is a condition that must be satisfied or waived for performance to be required. When a party breaches, the usual remedies are specific performance, damages, or rescission — and the earnest money is not automatically the answer.

Traps that cost points

Calling a contract signed by a minor void.

It is voidable by the minor, who may also choose to perform.

Accepting an offer after making a counteroffer.

The counteroffer killed it. Only a fresh offer can be accepted.

Assuming the seller keeps the earnest money on any buyer default.

It depends on the contract's remedy clause and on whether a contingency excused performance.

Common questions

What is the difference between void and voidable?

A void contract has no legal effect from the beginning — for example, one with an illegal purpose. A voidable contract is valid and enforceable until the protected party, such as a minor or a defrauded buyer, chooses to disaffirm it.

Does a counteroffer end the original offer?

Yes. A counteroffer rejects and terminates the original offer. The original offer cannot be accepted afterward unless the original offeror makes it again.

Do real estate contracts have to be in writing?

Contracts for the sale of an interest in real property must generally be in writing and signed to be enforceable. An oral agreement may still be a real agreement between the parties, but a court will not enforce it.

Practice it, don't reread it.

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