PSI Virginia Real Estate Practice Exam

What must an agreement include to be considered valid?

1. A verbal commitment from both parties

2. An exchange of gifts

3. A written document with legal purpose

4. A notarized signature

The correct answer is: A written document with legal purpose

For an agreement to be considered valid, it typically must include a written document that serves a legal purpose. This requirement ensures that the terms of the agreement are clear and enforceable in a court of law. A written document helps prevent disputes by providing a tangible record of what both parties have agreed upon, making it easier to establish the intentions and obligations of each party. While some agreements can be made verbally, for many contracts—especially those involving significant transactions, such as real estate—the law often necessitates that they be in writing to be enforceable. Furthermore, the agreement must serve a legal purpose, meaning it cannot involve activities that are unlawful or against public policy. Although notarization can add an extra layer of authenticity and may be required for certain types of agreements, it is not a blanket requirement for all valid agreements. Similarly, the exchange of gifts does not constitute a foundational element of most agreements. Thus, having a written document with a legitimate legal purpose is the cornerstone of a valid agreement.