Oregon 30-Hour Real Estate Law Practice Test

When offer and acceptance has occurred, both parties enter into what?

1. A mutual agreement

2. A legal obligation

3. A financial contract

4. A verbal commitment

The correct answer is: A mutual agreement

When offer and acceptance has occurred, both parties enter into a mutual agreement. This phrase signifies that both parties have come to a consensus regarding the terms of a transaction or contract, which is a fundamental principle of contract law. In a mutual agreement, both parties have willingly accepted the terms proposed, demonstrating their meeting of the minds. While legal obligations do arise from a contract, the term "legal obligation" focuses specifically on the responsibilities that each party must uphold under the law. Financial contract primarily emphasizes monetary terms and does not encompass the broader aspects of the mutual agreement. A verbal commitment lacks the enforceability that a written or formal mutual agreement offers and does not necessarily encompass all the details needed for a valid contract. Hence, "mutual agreement" accurately captures the essence of the relationship formed through the process of offer and acceptance.