Certified Residential Appraiser Practice Exam

What is required for acceptance in a contract?

1. Public announcement of intent

2. A verbal agreement without necessity of formalization

3. A proposal in writing

4. A clear expression of readiness to be bound by the terms

The correct answer is: A clear expression of readiness to be bound by the terms

Acceptance in a contract requires a clear expression of readiness to be bound by the terms outlined in the proposal or offer. This means that the party receiving the offer must demonstrate an unequivocal agreement to the specific terms and conditions without any conditions or modifications. Such acceptance signifies the mutual consent necessary to form a binding contract. This understanding stems from the principle of mutual assent in contract law, where an offer and acceptance create the agreement between parties. Clear communication—whether written, verbal, or implied—of the readiness to accept the terms is vital. It assures that both parties understand and agree to the obligations they are undertaking, ultimately leading to the enforceability of the contract. In contrast, public announcements, informal verbal agreements, or mere proposals often lack the necessary components of formal acceptance. For instance, a public announcement of intent may signal interest but does not constitute a binding agreement. A verbal agreement may not always carry the weight of acceptance unless it is clear and unequivocal and backed by the intent to be bound, while a written proposal alone does not imply acceptance unless the terms are explicitly agreed upon by the other party.