California Real Estate Practice Exam

If a deposit receipt does NOT contain a legal description of the property to be purchased, it would be:

1. illegal.

2. unenforceable.

3. voidable.

4. none of the above.

The correct answer is: illegal.

A deposit receipt that does not include a legal description of the property to be purchased is considered unenforceable rather than illegal. In real estate transactions, for a contract to be valid and enforceable, it typically must include essential elements, one of which is a legal description of the property. This is necessary to clearly identify the subject of the agreement and avoid any ambiguity. Without this information, the parties may find it difficult to ascertain what property is being referred to, leading to challenges in enforcing the contract terms. This lack of clarity can render the agreement unenforceable in a legal context, meaning that even if the parties intended to create a contract, they may not be able to enforce it due to the absence of critical information. Therefore, an absence of a legal description impacts the enforceability of the contract significantly, reflecting the importance of clear and precise terms in real estate documents.