PSI Virginia Real Estate Practice Exam

What are the rights of parties in a legally valid contract?

1. The rights of parties are guaranteed through the contract

2. Parties have no obligations to perform

3. Rights are the same as contract duties

4. Rights depend on external legalities

The correct answer is: The rights of parties are guaranteed through the contract

In a legally valid contract, the rights of the parties are guaranteed through the terms and provisions outlined within the contract itself. A contract is a binding agreement that creates obligations enforceable by law, and the rights established in it provide a framework for what each party is entitled to receive or claim. These rights ensure that each party can seek remedy or enforcement, should one party fail to fulfill their obligations. This is crucial in the context of real estate transactions, where specific rights, such as the right to possession, the right to compensation, and the right to enforce terms, are clearly defined in the contract. It ensures clarity and security for both parties involved in the agreement. Other options do not accurately represent the nature of rights within a contract. Obligations are a fundamental part of what contracts entail, and rights should not be equated to duties. Rights being dependent on external legalities misrepresents the self-contained nature of contract law, where the rights and duties are defined internally by the agreement itself.