Oregon 30-Hour Real Estate Law Practice Test

What contract clause prevented Saul from being able to sue Janelle?

1. Indemnification

2. Waiver

3. Arbitration

4. Force majeure

The correct answer is: Arbitration

The correct answer is arbitration, which is a common clause included in contracts to provide a mechanism for dispute resolution outside of the court system. When a contract contains an arbitration clause, the parties agree to resolve any disputes through arbitration rather than through litigation. This means if Saul wanted to sue Janelle over a disagreement or breach related to the contract, he would first have to pursue the arbitration process as dictated by the contract terms. If he failed to do so, he would be precluded from bringing a lawsuit in court regarding the same matter. Arbitration is often seen as a faster and more cost-effective alternative to litigation. It also allows for a more private resolution to disputes. The binding nature of arbitration can prevent parties from engaging in lawsuits in traditional court settings, thus limiting the legal avenues available for recourse. The other options, such as indemnification, waiver, and force majeure, serve different purposes within contracts. Indemnification clauses are intended to allocate risk by requiring one party to compensate the other for certain losses. Waiver clauses typically involve relinquishing a right or claim, while force majeure clauses relate to unforeseeable circumstances that prevent one or both parties from fulfilling their contractual obligations. While these can affect legal actions, they do not specifically