Florida real estate contracts: what the exam asks

Real estate contracts is the heaviest topic on the exam: 12%, twelve questions of a hundred. Most of it is not in Chapter 475 but in the common law of contracts, plus a handful of Florida statutes on form and disclosure. This page runs from the general (what makes a contract valid) to the specific (what a Florida listing must say and what a seller must disclose). An orientation, not legal advice. Leer en español.

What makes a contract valid

Competent parties: of age and of sound mind.
Mutual assent: an offer and an acceptance that match; the “meeting of the minds”.
Legal purpose.
Consideration: something of value from each side. It need not be money.
In writing, when the law requires it. Florida's Statute of Frauds (F.S. 725.01) requires contracts for the sale of real property, and leases of more than one year, to be in writing and signed by the party to be bound. An oral contract to sell a house is not enforceable.

Time limits to sue (F.S. 95.11): five years on a written contract, four on an oral one. The exam swaps them as distractors.

The classifications the exam uses as vocabulary

Bilateral: a promise for a promise (the typical purchase contract). Unilateral: one party promises, and is bound only if the other acts. The exam's example is a bonus a broker offers “to whoever sells X”, or an option to buy.
Express: the terms are in words, spoken or written. Implied: inferred from conduct.
Executory: something remains to be performed. Executed: fully performed. A separate axis from the last one; a contract can be express and executory at once.
Valid, void (no legal effect, e.g. an illegal purpose), voidable (one party can undo it: a minor, or someone who signed under fraud or duress) and unenforceable (valid but a court will not enforce it, like an oral contract to sell land).

Offer, acceptance and the effective date

The offeror may revoke an offer any time before it is accepted, unless consideration was given to keep it open (that is an option).
A counteroffer rejects the original offer and creates a new one. The original can no longer be accepted.
Acceptance must be communicated. The contract's effective date is when final acceptance is communicated, usually when the last party signs. Deadlines run from there.
“Time is of the essence”: dates are material terms, and missing one is a breach. If the contract is silent, a reasonable time is implied.
A contingency (inspection, financing) is a condition precedent. If it is not met even though the buyer did what the clause required, the buyer is released and the deposit comes back. Losing the deposit comes only after a breach.

Breach: what each side can do

Buyer defaults: the seller usually keeps the deposit as liquidated damages (the FAR/BAR contract says so), or sues for damages.
Seller defaults: the buyer may rescind and recover the deposit, sue for damages, or seek specific performance to force the sale. That remedy exists because every parcel is unique. Failing to deliver marketable title is a seller breach.
Novation: substituting the contract or a party with another, with everyone's consent; it releases the one replaced. Assignment: transferring the rights, but the assignor remains liable unless released.
Accord and satisfaction: agreeing to accept a different performance (the accord) and performing it (the satisfaction), which discharges the original obligation.

Listing agreements: what Florida requires

A listing is an employment contract between the owner and the broker. Types: exclusive right of sale (the broker is paid whoever sells), exclusive agency (the owner may sell alone without paying a commission), open listing (several brokers; the one who produces the buyer is paid) and net listing (the broker keeps whatever exceeds a net price; legal in Florida, but still a listing with every usual requirement).

F.S. 475.25(1)(r) requires a written listing to have a definite expiration date, the property description, the price and commission, the owner's signature, and that the broker deliver a copy within 24 hours. It may not renew automatically. A listing without an expiration date is grounds for discipline.

What the seller has to disclose

Known material defects that are not readily observable: Johnson v. Davis (Fla. 1985). That the buyer could have inspected is no excuse; the hidden defect is exactly where an inspection may not reach. Florida is not a pure “caveat emptor” state in residential sales.
Property taxes (F.S. 689.261): a summary warning that the buyer's taxes may differ greatly from the seller's. It goes in or with the contract; it is for the buyer, not filed anywhere.
Radon (F.S. 404.056): the standard radon notice in every contract of sale, or a lease over 45 days.
Energy efficiency (F.S. 553.996): the information brochure before or at signing.
Sinkhole claims (F.S. 627.7073(2)(c)): if an insurance claim for sinkhole damage was made and paid, it must be disclosed.
Condominiums (F.S. 718.503): documents to the buyer; a buyer from a developer has 15 days to rescind, a resale buyer 3 days. Homeowners' associations: F.S. 720.401.
Lead-based paint (federal, housing built before 1978): pamphlet, disclosure, and 10 days to inspect unless agreed otherwise in writing.

What a licensee may and may not do with a contract

A licensee may fill in the blanks of an approved form (the FAR/BAR contract, for example). Drafting clauses or explaining their legal effect is the unauthorized practice of law (F.S. 454.23). The exam asks where the line is; the answer is nearly always “fill in yes, draft no”.

How the exam asks it

Vocabulary. A situation, and four words (bilateral, unilateral, executory, voidable…). Learn the classifications as pairs of opposites.
Chronology. Offer, counteroffer, revocation, acceptance: what is still alive at each step. Draw the timeline.
Remedies. Who breached and what the other can do. Specific performance is the buyer's; liquidated damages, the seller's.

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