What is tested in Contracts?
| Official PSI area | Contracts |
|---|---|
| Exam portion | National portion |
| Published weight | 19% of the 100-question national portion |
| Published branches | 3 |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Last verified | August 2, 2026 |
The Rule
Nineteen percent is the published weight for the whole branch. PSI does not disclose how those questions divide among formation, leases, remedies, contingencies, or multiple offers.
Why this area matters
Contract questions are decision sequences. First classify the agreement, then decide whether it formed, whether it is enforceable, what duty remains, and which remedy or termination event fits.
Complete official content outline
These are all branches named in PSI's current salesperson outline. The teaching points below unpack each branch so you can move from recognition to application.
A. General contract law
Build a contract from offer through performance and know what changes its legal effect.
- General contract principles
- Elements of a valid contract
- Statute of Frauds
- Difference between an offer and a contract
- Enforceability
- Void, voidable, and unenforceable agreements
- Bilateral and unilateral contracts
- Option agreements
- Notice, delivery, acceptance, and execution
- Electronic signatures and paperless transactions
- Rights and obligations of the parties
- Remedies for breach or nonperformance
- Termination, rescission, and cancellation
B. Purchase and lease contracts
Identify the document, provision, and condition that controls the scenario.
- Addenda and amendments
- Purchase agreements
- Contingencies and methods of satisfaction
- Leases and rental agreements
- Lease-purchase agreements
- Types of leases
C. Multiple offers and counteroffers
Protect the client, present as instructed and required, and never imply that a counteroffer preserves the original offer.
- Presentation and communication
- Counteroffers as rejection plus new offer
- Offer confidentiality and client instructions
- Avoiding unauthorized legal conclusions or favoritism
Complete lesson sequence
Work in order the first time. Each page connects the official topic to a full lesson, Georgia distinction, worked example, exam traps, original questions, mastery check, and recommended next lesson.
Lesson 81
Contract Validity and Enforceability
Check formation elements, required form, and available defenses before classifying the agreement.
Lesson 82
Contract Classifications
Ask which dimension the question tests: how formed, what exchanged, whether performed, or whether enforceable.
Lesson 83
Offer, Acceptance, Counteroffers, and Electronic Contracting
Build a timeline and identify the last unchanged offer that was effectively accepted before termination.
Lesson 84
Contract Performance, Breach, and Remedies
Identify the duty, whether the failure is material, the contract's remedy clause, and whether money can adequately address the loss.
Lesson 85
How Real Estate Contracts End
Name the termination event and confirm every required notice, consent, deadline, and release.
Lesson 86
Options, Rights of First Refusal, and Related Rights
Ask whether fixed terms are open now, an outside offer has triggered a matching right, or the owner must negotiate with the holder first.
Lesson 87
Purchase Agreements and Addenda
For every clause, identify who must do what, by when, using which notice, and what happens if it does not occur.
Lesson 88
Leases and Leasehold Estates
Classify the term, possession status, and amount of the tenant's remaining interest transferred.
High-value distinctions and exam traps
Use these after the complete lesson sequence. Each comparison puts easily confused terms into the same decision table, then tests the controlling fact in a new scenario.
Comparison 197
Void Versus Voidable Versus Unenforceable Contracts
Ask whether legal validity never arose, a protected party has a choice, or an enforcement defense blocks the court remedy.
Comparison 198
Executed Versus Executory Contract
Determine whether the question asks about signing or performance, then list every material duty that remains.
Comparison 199
Bilateral Versus Unilateral Contract
Ask whether acceptance occurs through a return promise or through the requested act.
Comparison 200
Addendum Versus Amendment
Ask whether the document supplements the original agreement package or changes a term after a binding contract already exists.
Comparison 201
Assignment Versus Novation
Identify what moved, whose consent was required, and whether the original party was expressly released from liability.
Comparison 202
Rescission Versus Cancellation Versus Termination
Read the remedy clause and ask whether the parties must restore prior benefits, merely end the agreement, or stop only future performance.
Comparison 203
Liquidated Damages Versus Specific Performance
Ask whether the claimant seeks a predetermined money remedy or actual completion, then check enforceability, exclusivity, election, and equitable defenses.
Comparison 204
Option Contract Versus Right of First Refusal
Ask whether the holder can initiate the purchase now or must wait for the owner's decision to sell and then match or accept the defined terms.
Comparison 205
Contingency Versus Condition
Identify the event, beneficiary, deadline, required notice or evidence, waiver rule, and stated consequence if the event occurs or fails.
Comparison 206
Offer Versus Counteroffer Versus Multiple Offers
Build a timeline for each document: delivery, change, counteroffer, revocation, expiry, acceptance, and communication, then apply any brokerage presentation duty.
Comparison 207
Lease Option Versus Lease Purchase
Ask whether the occupant may choose not to buy or has already promised to buy, then inspect exercise, rent-credit, financing, default, and deadline terms.
Georgia-specific distinction
Worked example: Follow the offer sequence
Scenario. A buyer offers $410,000. The seller signs a counteroffer at $420,000. Before the buyer accepts, the seller says they now prefer the original $410,000 offer.
Reason it through. The seller's counteroffer rejected the original offer and created a new offer. The seller cannot revive the buyer's original offer simply by deciding to accept it later. A new offer or renewed assent is needed. The trap is treating negotiation documents as if all versions remain open at once.
Common exam traps
- Confusing valid with enforceable
- Treating a counteroffer as an acceptance
- Using amendment and addendum as synonyms
- Assuming earnest money is always required for a valid contract
- Giving rescission, cancellation, and termination the same legal effect
Original practice questions with explanations
Answer each question before opening the explanation. These are original instructional questions mapped to the official outline. They are not copied from PSI or a live exam.
Question 1A seller changes the closing date before signing a buyer's offer. What has the seller most likely created?
- A. Acceptance
- B. Counteroffer
- C. Assignment
- D. Novation
Show answer and explanation →
Answer: B. Counteroffer
A material change rejects the original offer and proposes new terms. That is a counteroffer, which the buyer may accept, reject, counter, or allow to expire.
Question 2Which classification describes an agreement that never had a lawful legal effect?
- A. Void
- B. Voidable
- C. Executed
- D. Unilateral
Show answer and explanation →
Answer: A. Void
A void agreement has no legal effect from the outset. A voidable agreement is valid unless the protected party elects to avoid it.
Question 3Which document usually adds a new provision to an agreement, while an amendment changes an existing provision?
- A. Addendum
- B. Deed
- C. Promissory note
- D. Estoppel certificate
Show answer and explanation →
Answer: A. Addendum
An addendum adds terms or material. An amendment changes terms after or as part of the parties' agreement, depending on timing and form.
Mastery tracking
Mark this area mastered only when every statement below is true.
- I can explain every official branch in plain English without notes.
- I can identify the Georgia distinction before reading the answer choices.
- I can solve a new scenario and state which fact controlled the answer.
- I can explain why each tempting distractor is wrong.
- I meet my accuracy target in mixed practice on at least two different days.
- I know which lesson to reopen when this area weakens.
Related lessons
Contract formation and failure
Deepen validity, enforceability, and termination.
Agency
Connect contract handling to duties and authority.
Contracts practice
Work the sequence in new fact patterns.
Recommended next lesson
Continue with Agency. Learn who the licensee represents and which duties control the contract decision.