Contracts on the NJ Real Estate Exam: What the 19% Covers
The short answer: Contracts is 19% of the general (national) content outline for the NJ salesperson exam, the largest single topic area PSI lists. It covers general contract law, purchase and lease contracts, and handling multiple offers and counteroffers (PSI candidate bulletin). The NJ-specific portion adds "Contracts and Other Documents" and "Listings and Content of Listing Agreements" as topics, and that's where New Jersey's own rules come in, especially N.J.A.C. 11:5-6.2.
This guide walks the contracts outline line by line and attaches the NJ rules you're expected to know. For the full exam format and scoring, see our NJ real estate exam (PSI) guide.
What does the PSI outline say about contracts?
Section V, "Contracts" (Sales 19%), has three parts (PSI candidate bulletin):
- A. General contract law (13 items): principles of contract law; elements of a valid contract; the Statute of Frauds; offer and contract; enforceability; void, voidable and unenforceable contracts; bilateral and unilateral contracts; option agreements; notice, delivery, acceptance and execution; electronic signatures and paperless transactions; rights and obligations of the parties; remedies for breach; and termination, rescission and cancellation.
- B. Purchase and lease contracts: addenda and amendments; purchase agreements; contingencies and how they're satisfied; leases and rental agreements; lease-purchase agreements; and types of leases.
- C. Handling multiple offers and counteroffers.
The bulletin doesn't say how many of the NJ "Statutes and Rules" items (22 for salespersons) are about contracts, so treat both parts as fair game.
What makes a contract valid, void, voidable or unenforceable?
These are general contract-law concepts, and the exam expects you to tell them apart quickly:
| Term | Plain meaning | Typical exam clue |
|---|---|---|
| Valid | Has all the required elements and can be enforced | Offer, acceptance, consideration, competent parties, legal purpose |
| Void | Has no legal effect from the start | Illegal purpose |
| Voidable | Valid until one party chooses to cancel it | A party was a minor or was misled |
| Unenforceable | Valid, but a court won't enforce it | Missing a required writing |
Two other pairs come up often. A bilateral contract is a promise for a promise, like a typical purchase agreement. A unilateral contract is a promise in exchange for an act, like an option, where only one side is bound until the act happens. And watch the vocabulary: PSI's own sample question defines rescission as "a return of all parties to their condition before the contract was executed" (PSI candidate bulletin).
How does the Statute of Frauds work in New Jersey?
The national outline tests the general idea that real estate agreements need a writing. New Jersey's own statute is worth knowing because it's a little different. An agreement to transfer an interest in real estate isn't enforceable unless the key terms (property description, the interest, the agreement and the parties) are in a writing signed by the party it's enforced against, or are proved by clear and convincing evidence (N.J.S.A. 25:1-13).
A separate section covers broker commissions. A broker is entitled to a commission only if the broker's authority is given or recognized in a writing signed by the principal that states the amount or rate. There's a narrow exception for oral agreements, which requires, among other conditions, written notice of the terms to the principal within five days (N.J.S.A. 25:1-16).
What NJ rules apply to offers, copies and changes?
N.J.A.C. 11:5-6.2(a) is the "who gets a copy, and when" rule. It's very testable:
- Offers and counteroffers: when a licensee writes up an offer that will become a binding instrument, the person making it gets a clear copy immediately after signing it.
- Changes: any change to an offer or counteroffer is initialed by the party proposing it and, if accepted, by the other party.
- Fully executed instruments: licensees must immediately deliver a clear copy with original signatures to all parties.
- Listings: clients get a fully executed copy of any sale or exclusive listing at the time it's signed. Failing to provide that copy, or leaving out a definite termination date, is also grounds for discipline under N.J.S.A. 45:15-17(f).
- Amendments and addenda prepared by licensees must comply with NJ's attorney review rules.
The rule defines "instrument" to include contracts of sale, leases, option agreements, and their addenda and amendments. It excludes listing agreements and buyer brokerage agreements.
How does attorney review fit in?
Licensee-prepared contracts for 1–4 unit residential sales and vacant one-family lots, and residential leases of a year or more, must include New Jersey's three-business-day attorney review language (N.J.A.C. 11:5-6.2(g)). We cover how the days are counted and how a disapproval is delivered in our attorney review guide, so we won't repeat it here. Just know that it is tested.
What are the rules for multiple offers and back-up offers?
The outline's "multiple offers and counteroffers" item connects to N.J.A.C. 11:5-6.4:
- Oral offers: the licensee must tell the person making the offer that the licensee isn't obligated to present an offer unless it's in writing.
- Written offers: every written offer received during the listing must reach the owner within 24 hours of the firm receiving it, unless the listing terms say otherwise.
- Oral acceptance: it must be secured in writing within 24 hours.
- Back-up offers: these are offers received after an earlier contract is pending and has survived attorney review. The owner must be advised in writing to consult an attorney, and the person making the back-up offer must be told in writing that a contract is pending, without disclosing its price or terms. Offers that come in while the first contract is still in attorney review aren't back-up offers. They're presented like any other offer.
What do listing questions look like?
Listings appear under both Agency ("types of listing contracts") and the NJ topic "Listings and Content of Listing Agreements." The NJ rules to know: no prescribed commission rate in listings or sale contracts; the "right to individually reach an agreement" notice in 1–4 family listings; the commission split disclosed on the seller's request; the full name of the MLS in listings submitted to one; and net listings are prohibited (N.J.A.C. 11:5-6.2(b)–(f)).
How should you study contracts?
- Build a one-page chart of valid, void, voidable and unenforceable, with one example each.
- For any offer scenario, ask: Who gets a copy, when, and who initials? That's 11:5-6.2(a).
- Memorize the two 24-hour rules and the back-up offer steps.
- Read N.J.A.C. 11:5-6.2 once in full. It's short and it's the source.
Contracts pairs naturally with agency on the NJ exam and real estate math, which round out the most heavily weighted sections. This page is exam-prep information, not legal advice. For timed practice, Business Elementary offers practice exams alongside its 75-hour pre-licensing course.
- Listing agreements are contracts too. See Exclusive Right to Sell, Exclusive Agency and Open Listings Explained.
Sources
- PSI, NJ Candidate Information Bulletin (updated 2/1/2026), content outline section V, NJ "Statutes and Rules," and sample questions: https://test-takers.psiexams.com/api/content/bulletin/1667
- N.J.A.C. 11:5-6.2, Contracts of sale, leases and listing agreements (via Cornell LII): https://www.law.cornell.edu/regulations/new-jersey/N-J-A-C-11-5-6-2
- N.J.A.C. 11:5-6.4, Obligations of licensees to public and to each other (via Cornell LII): https://www.law.cornell.edu/regulations/new-jersey/N-J-A-C-11-5-6-4
- N.J.S.A. 45:15-17 (via Justia): https://law.justia.com/codes/new-jersey/title-45/section-45-15-17/
- N.J.S.A. 25:1-13, Enforceability of agreement regarding real estate (via Justia): https://law.justia.com/codes/new-jersey/title-25/section-25-1-13/
- N.J.S.A. 25:1-16, Commissions of real estate broker, writing required (via Justia): https://law.justia.com/codes/new-jersey/title-25/section-25-1-16/
Last reviewed: October 27, 2026
Related guides:
- What actually comes with the house? See Fixtures vs. Personal Property: What Stays With the House? for the three-part fixture test and how contracts settle it.
- For the contingencies item on the exam outline, see Mortgage, Inspection and Appraisal Contingencies: what each one does and how it differs from attorney review.
Frequently Asked Questions
What percentage of the NJ real estate exam is contracts?
Contracts is 19% of the general (national) content outline for salespersons, the same weight PSI lists for broker candidates (PSI bulletin).
Are listing agreements "instruments" under NJ's copy-delivery rule?
No. N.J.A.C. 11:5-6.2(a) excludes listing agreements and buyer brokerage agreements from "instrument," although clients must still get a fully executed copy of a sale or exclusive listing when it's signed (N.J.A.C. 11:5-6.2).
Does a NJ agent have to present an oral offer?
No. The licensee must tell the person making the offer that they aren't obligated to present an offer unless it's in writing (N.J.A.C. 11:5-6.4(g)).
What does "rescission" mean on the exam?
A return of all parties to their condition before the contract was executed. That's the definition in PSI's own sample question (PSI bulletin).
Is an offer received during attorney review a back-up offer?
No. Back-up offers are those received after a pending contract has survived attorney review. Offers that arrive during attorney review are presented like any other written offer (N.J.A.C. 11:5-6.4(h)).