Ontario Mortgage Agent Practice Exam

What is a contract?

1. A legally enforceable agreement made between two or more parties

2. A court order that prohibits a party from doing something or acting in a certain manner

3. An event outside of the control of the parties to a contract making the contract impossible to perform

4. The promise to accept the offer in an agreement

The correct answer is: A legally enforceable agreement made between two or more parties

A contract is a legally enforceable agreement made between two or more parties. This means that all parties involved are bound by the terms of the agreement and can be held accountable if they do not fulfill their obligations. Option B, a court order, is incorrect because a contract is not a court order but rather an agreement voluntarily entered into by the parties. Option C, an event outside of the control of the parties, is incorrect because while unforeseen circumstances may affect the performance of a contract, the contract itself is not considered impossible to perform. Option D, the promise to accept the offer, is incorrect because a contract is not just a promise, but a legally binding agreement that encompasses all of its terms and conditions.