Which of the following is NOT an example of full consideration?

Study for the Arizona 6-Hour Contract Writing Course. Use flashcards and multiple choice questions with hints and explanations. Prepare effectively for your exam!

Full consideration in contract law refers to the value exchanged between parties, ensuring that each party is offering something of equivalent worth in a transaction. In the context of a contract, consideration is an essential element that validates the agreement.

Earnest money, while important in real estate transactions, represents a deposit made to demonstrate a buyer's commitment to purchasing a property, rather than being the actual consideration exchanged in the contract itself. It does not equate to the full value offered by either party; instead, it serves as a pledge or good faith deposit that gets applied toward the purchase price at closing but does not represent the entirety of what is being exchanged.

In contrast, labor or physical actions, real estate or personal property, and the purchase price of a home all represent substantial forms of consideration. When either party delivers labor or services, or when property or purchase price is transferred, those actions embody full consideration because they reflect a complete transactional exchange where both parties fulfill their obligations fully. This understanding clarifies why earnest money does not meet the criteria for full consideration in this context.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy