California Real Estate Practice Exam

A verbal agreement on the sale of property is?

1. Legally binding

2. Void and unenforceable

3. Subject to verification

4. Considered a gentleman's agreement

The correct answer is: Void and unenforceable

Verbal agreements on the sale of property are considered void and unenforceable because they lack a written contract and thus do not provide clear evidence of the terms and conditions agreed upon. This makes it difficult to hold either party accountable in case of any disputes or breaches of the agreement. Additionally, a verbal agreement may be subject to different interpretations by each party, leading to confusion and potential conflicts. Therefore, without a written contract, a verbal agreement on the sale of property is not considered legally binding. Option A is incorrect because, in order for an agreement to be legally binding, it must be in writing and signed by both parties. Option C is also incorrect because subject to verification means that the terms of the agreement have not been completely confirmed or validated, making it an unreliable form of agreement. Option D, a gentleman's agreement, means that an agreement is based on trust and honor rather than