Humber/Ontario Real Estate Course 1 Exam Practice

Buyer Sanderson and Seller Jalcos agree with a handshake to purchase a home. Which statement is accurate regarding the enforceability of their agreement?

1. The contract is legally enforceable assuming that Sanderson and Jalcos are two capable and competent individuals.

2. The contract is not legally enforceable because it does not comply with the Vendors and Purchasers Act, which requires that the agreement be in writing.

3. The contract is not legally enforceable because the handshake took place without a witness.

4. The contract would be legally enforceable if it was subsequently put in writing and signed by both Sanderson and Jalcos.

5. The contract would be invalid due to a lack of a formal agreement.

6. The contract would be considered a verbal agreement and hold no legal weight.

The correct answer is: The contract would be legally enforceable if it was subsequently put in writing and signed by both Sanderson and Jalcos.

The selection highlighting that the contract would be legally enforceable if it was subsequently put in writing and signed by both Sanderson and Jalcos is accurate. In real estate transactions, while oral agreements can sometimes be recognized, the law generally requires that contracts for the sale of land be in writing to be enforceable under the Statute of Frauds. The original handshake agreement, though indicative of the parties' intention, lacks the specific written documentation necessary to be enforceable unless confirmed in writing later. This aligns with the principles outlined in the Vendors and Purchasers Act, which stipulates that a signed written contract is essential for the enforceability of agreements regarding the sale of real property. By putting the agreement in writing afterward, the parties can create a legally binding contract that complies with statutory requirements, solidifying their intentions and agreements. Other statements provide incorrect contexts: some suggest the feasibility of enforceability through oral agreements without addressing the prerequisites outlined by law, while others mistakenly prioritize witnessing or formal agreements over the necessity of written contracts.