What is the exam-ready answer?
| Roadmap lesson | 85 of 500 |
|---|---|
| Official syllabus topic | How Real Estate Contracts End |
| 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 |
| Last verified | August 2, 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.
Complete lesson
Read each concept as part of one decision system. The exam often gives one accurate statement and three statements that belong to a nearby concept.
Performance and expiration
Full performance discharges the parties. An option or contract can also expire by its stated time without exercise or extension.
Agreement-based endings
Mutual rescission cancels the contract. Release gives up a claim or duty. Novation replaces a party or obligation and releases the former one with all required consent.
Contingencies
A condition states an event affecting duty to perform. Properly invoked failure can permit termination, but deadlines, notice, cooperation, and waiver matter.
Operation of law
Illegality, bankruptcy rules, destruction, impossibility, or limitations rules may affect duties, depending on facts and governing law.
Decision rule
Georgia-specific distinction
Worked example
Scenario. Buyer assigns contractual rights to another person, but Seller never agrees to release Buyer from the duties.
Reason it through. Assignment can transfer rights, but it does not by itself create a novation or erase the original party's liability.
Answer. Buyer may remain obligated unless a valid release or novation occurs.
Common exam traps
- Treating assignment as novation
- Missing contingency notice deadlines
- Assuming breach automatically rescinds
- Confusing release with performance
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 1Which requires agreement to substitute and release an original party?
- A. Assignment
- B. Novation
- C. Recording
- D. Appraisal
Show answer and explanation →
Answer: B. Novation
Novation creates the agreed substitution and releases the replaced party.
Question 2Does assignment automatically end the original contract?
- A. Yes
- B. No
- C. Only for leases
- D. Only if recorded
Show answer and explanation →
Answer: B. No
Assignment transfers rights; the contract and remaining liabilities can continue.
Question 3A contract is completed exactly as promised. How is it discharged?
- A. Performance
- B. Breach
- C. Escheat
- D. Foreclosure
Show answer and explanation →
Answer: A. Performance
Full performance satisfies the contractual duties.
Mastery tracking
Mark this lesson mastered only when every statement is true.
- State the direct answer and decision rule without notes.
- Explain every core concept in plain English.
- Solve the worked example after changing one important fact.
- Identify the Georgia distinction before reading answer choices.
- Answer all three questions correctly and reject every distractor.
- Repeat the topic in mixed practice on a later day.
Recommended next lesson
Continue with Options, Rights of First Refusal, and Related Rights. Continue to roadmap lesson 86 and build on this decision rule.
Return to the Contracts hub to see every official branch and the complete lesson sequence for this content area.