Humber/Ontario Real Estate Course 1 Exam Practice

After a verbal agreement about leaving a patio set, what must occur for it to be enforceable in contract law?

1. A contract exists because the parties have mutually agreed that the patio set will remain with the property.

2. The verbal agreement involving the patio furniture is not lawful, as it did not form part of the original agreement of purchase and sale.

3. A contract does not exist relating to the patio set because there is no consideration.

4. A contract does exist regarding the patio set, and Buyer Johnson can refuse to close the home transaction if that furniture is not left.

5. The verbal deal is effective if both parties agree in front of witnesses.

6. The purchase agreement must include an amendment for the patio set to stay.

The correct answer is: A contract does not exist relating to the patio set because there is no consideration.

For a verbal agreement regarding the patio set to be enforceable in contract law, one of the fundamental requirements is that there must be consideration—a mutual exchange of value between the parties involved. In this case, the absence of consideration means that the verbal agreement regarding the patio set does not constitute a legally binding contract. Consideration typically involves a benefit or compensation that is exchanged as part of the contract formation. If one party simply states they will leave the patio set without the other party providing something of value in return, then that agreement lacks the necessary foundation that contract law requires. Therefore, without consideration, the agreement cannot be enforced, making it ineffective as a contract. In contrast, while other options discuss elements like mutual agreement or documenting the item in a purchase agreement, they do not address this crucial aspect of consideration that is essential for enforceability in contract law.