What is the exam-ready answer?
| Official syllabus topic | Contract Classifications |
|---|---|
| Official PSI area | Contracts |
| Published area weight | 19% of the 100-question national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.
The lesson
These ideas work together. On the exam, the wrong answers usually describe a nearby concept, so learn where each one stops.
Express and implied
Express terms may be oral or written. An implied-in-fact agreement is inferred from conduct and circumstances, not merely from fairness.
Bilateral and unilateral
Most purchase agreements are bilateral because buyer and seller exchange promises. An option is commonly analyzed as unilateral during the option period because the optionee is not required to exercise.
Executed and executory
A fully performed contract is executed. A signed purchase contract awaiting closing is executory even though it is binding.
Validity labels
Valid, void, voidable, and unenforceable concern legal effectiveness. They do not replace labels describing expression, promise structure, or performance.
Decision rule
Georgia-specific distinction
Worked example
Scenario. Buyer and seller sign a purchase agreement and closing is next month.
Reason it through. The terms are written, each party made promises, and material performance remains.
Answer. The contract is express, bilateral, and executory, assuming it is otherwise valid.
Common exam traps
- Calling signed contracts executed
- Assuming express means written only
- Treating labels as mutually exclusive
- Calling every option bilateral
Original practice questions with detailed explanations
These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1A buyer and seller sign a purchase agreement on March 1 with closing set for April 15. How is the contract best described on March 20?
- A. Executory and bilateral
- B. Executed and bilateral
- C. Executory and unilateral
- D. Executed and unilateral
Show answer and explanation →
Answer: A. Executory and bilateral
Both parties exchanged promises, which makes it bilateral, and closing is still ahead, which makes it executory. Executed is the plausible label because the contract is signed, but executed means fully performed.
Question 2An owner gives a neighbor a 90-day option to buy a lot for $80,000. The neighbor paid $1,000 for the option and has not decided whether to buy. During the option period, how is the agreement generally classified?
- A. Bilateral, because both parties signed
- B. Unilateral, because only the owner is bound
- C. Void, because the neighbor made no promise
- D. Executed, because the $1,000 was paid
Show answer and explanation →
Answer: B. Unilateral, because only the owner is bound
An option is commonly treated as unilateral during the option period because the owner must hold the offer open while the optionee is free not to buy. Bilateral is the wrong answer since both signed, but signatures do not make both sides promise to perform.
Question 3Which pair of labels could accurately describe the same signed purchase contract at the same time?
- A. Express and implied
- B. Valid and void
- C. Executed and executory
- D. Express and executory
Show answer and explanation →
Answer: D. Express and executory
Express describes how the contract was formed and executory describes its performance status, so one contract can carry both. Each of the other pairs sets two opposites from the same category against each other, which is the mistake of treating all labels as one list.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Contract Classifications in one clear answer without notes.
- Separate Express and implied from Bilateral and unilateral using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
Recommended next lesson
Continue with Offer, Acceptance, Counteroffers, and Electronic Contracting. With the labels sorted, the next lesson shows how a contract forms in the first place: mirror-image acceptance, why a changed price is a counteroffer that kills the original offer, and how delivery rules in Georgia forms decide when acceptance counts.
Return to the Contracts hub to see every official branch and the complete lesson sequence for this content area.