Question 55

Open listing is a unilateral contract.

An open listing is considered a unilateral contract because it involves only one party (the seller) making a promise to pay a commission to any broker who successfully sells the property, while the broker does not have any obligations to the seller.

A) Exclusive agency listing

An exclusive agency listing is not a unilateral contract because it creates a mutual obligation between the seller and one broker. In this agreement, the seller agrees to pay the broker a commission if the broker finds a buyer, but the seller can still sell the property themselves without owing a commission.

B) Net listing

A net listing is also not a unilateral contract. In this type of agreement, the seller sets a minimum price they wish to receive from the sale, and any amount above that goes to the broker as commission. This creates a mutual obligation, as the broker must work to sell the property for a price higher than the net amount.

C) Exclusive authorization and right-to-sell listing

An exclusive authorization and right-to-sell listing is not a unilateral contract either. In this arrangement, the seller grants one broker exclusive rights to sell the property, creating a binding contract where both parties have specific obligations to fulfill.

D) Open listing

An open listing is a unilateral contract because it allows the seller to list their property with multiple brokers, and only the broker who brings a buyer is entitled to a commission. The seller is not obligated to work with any specific broker, which aligns with the characteristics of a unilateral contract.

Conclusion

The open listing stands out as a unilateral contract because it establishes a one-sided promise from the seller to pay a commission to any broker who finds a buyer, without creating mutual obligations. In contrast, the other options involve mutual agreements that require obligations from both parties, disqualifying them from being classified as unilateral contracts.