Humber/Ontario Real Estate Course 1 Exam Practice

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What describes the legal standing of a verbal agreement made after a written purchase contract?

Altered contract due to mutual agreement.
Conditionally binding promise.
Enforceable supplementary agreement.
Lawful addendum to original contract.
Null and void due to lack of consideration.
Voluntary add-on subject to personal agreements.

The correct answer is: Null and void due to lack of consideration.

In the context of real estate transactions, verbal agreements made after a written purchase contract generally hold little to no legal standing due to the principle of "lack of consideration." Consideration is essential in forming a contract and refers to something of value exchanged by the parties, typically money, goods, or services. In this scenario, since the written purchase contract already outlines the terms and considerations of the agreement, any subsequent verbal agreement lacking this element would not be considered legally binding. Consequently, the verbal agreement would be deemed null and void.