What is the exam-ready answer?
| Official syllabus topic | Contract Validity and Enforceability |
|---|---|
| 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.
Capacity and legality
Parties must have required legal capacity, and the objective cannot violate law or public policy. Capacity problems often make an agreement voidable rather than automatically void.
Agreement and consideration
Mutual assent requires an offer and acceptance of the same material terms. Consideration is bargained-for legal value and need not be equal in economic amount.
Writing and signatures
The statute of frauds requires specified real estate agreements to be evidenced by a sufficient signed writing. Electronic records and signatures may satisfy applicable requirements.
Four classifications
Valid, void, voidable, and unenforceable describe different legal consequences. An executed or executory label instead describes performance status.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A competent buyer and seller orally agree to a year-long future purchase of land but never sign a writing.
Reason it through. The parties may have discussed all terms, but a land-sale agreement ordinarily falls within a writing requirement.
Answer. The agreement may be unenforceable under the statute of frauds rather than void for an illegal objective.
Common exam traps
- Calling every defective agreement void
- Assuming consideration must be cash
- Confusing enforceability with formation
- Calling an executory contract void
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 17-year-old signs a contract to buy a vacant lot from an adult seller. How is the contract generally classified?
- A. Void from the start
- B. Unenforceable by either party
- C. Valid and binding on both
- D. Voidable by the minor
Show answer and explanation →
Answer: D. Voidable by the minor
A minor lacks full contractual capacity, which usually makes the contract voidable at the minor's option. Void is wrong because capacity problems generally let the protected party choose, while void is reserved for agreements with no legal effect at all.
Question 2A competent buyer and seller orally agree on every term for the sale of a lot, and no one signs anything. The seller later refuses to go forward. How is the agreement best classified?
- A. Void, because it was never written
- B. Voidable, at the seller's option
- C. Unenforceable under the statute of frauds
- D. Valid and fully enforceable in court
Show answer and explanation →
Answer: C. Unenforceable under the statute of frauds
A contract for the sale of land needs a sufficient signed writing, so this agreement may exist in substance but cannot be enforced. Void is wrong because a missing writing makes the agreement unenforceable, not void.
Question 3A buyer's promise to pay $250,000 is exchanged for the seller's promise to convey. The seller later claims there is no consideration because the buyer's earnest money was only $500. Is the seller right?
- A. No, the exchanged promises are consideration
- B. Yes, consideration requires earnest money
- C. Yes, consideration must equal fair value
- D. No, but only once the deed is recorded
Show answer and explanation →
Answer: A. No, the exchanged promises are consideration
Consideration is bargained-for legal value, and mutual promises qualify on their own. The belief that consideration must be cash or earnest money is the misconception here, since the amount of earnest money does not decide whether a contract formed.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Contract Validity and Enforceability in one clear answer without notes.
- Separate Capacity and legality from Agreement and consideration 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 Contract Classifications. Validity is one set of labels, and the next lesson adds the others the exam mixes in: express or implied, bilateral or unilateral, executed or executory, and how one signed Georgia contract can carry several at once.
Return to the Contracts hub to see every official branch and the complete lesson sequence for this content area.