Humber/Ontario Real Estate Course 1 Exam Practice

A legal principle stating that a contract must have clear terms to be enforceable is known as:

1. Mutual consent

2. Non est factum

3. Definiteness

4. Consideration

The correct answer is: Definiteness

The principle that a contract must have clear terms to be enforceable is known as definiteness. This means that the terms of the agreement must be sufficiently clear and specific so that all parties understand their obligations and can enforce the agreement if necessary. Definiteness ensures that there is a mutual understanding of what is being agreed upon, which is crucial for creating valid contracts. If the terms are vague or uncertain, it may lead to a lack of enforceability, as the parties may not have a clear understanding of their rights and responsibilities. Mutual consent refers to the agreement of both parties to the contract but does not directly address the clarity of the terms. Non est factum relates to a defense in contract law that can be invoked when a party claims they were unaware of the true nature of the document they signed, which is different from the requirement of clarity in contractual terms. Consideration involves the exchange of value between the parties of the contract, but it also does not directly address the necessity for clear, understandable terms.