Contracts is the largest single area of the State exam at 8 items, and with critical business services (escrow, title insurance, lending) it makes 13 of the 60 scored items. The questions sit on the Arizona layer: what must be in writing, how an escrow works under Arizona law, and the steps from accepted contract to closing and possession. Contract law in general is national: contracts.
Updated Oct 24, 2026 · Not affiliated with any state commission or test provider.
13scored items, areas VIII + IX
14questions on this page
8items on Contracts (VIII) alone
What the two areas cover
From the State outline: Contracts 8 items, critical business services 5.
Employment agreements: listing and buyer agreements between a client and the brokerage.
Purchase contracts: what makes one valid, consideration, terms and conditions, the closing process and possession, closing costs.
Escrow: the neutral holder of money and documents until the contract’s conditions are met.
Title insurance and lending: the services a transaction relies on to close.
What must be in writing
In writing and signed: a sale of real property, a lease over one year, and an agreement employing a broker to buy or sell for a commission (A.R.S. § 44-101). The last item is the one agents feel: a commission agreement that is not in writing and signed cannot be enforced in court. When an agent signs a sale or long lease for a party, the agent’s own authority must be in writing too (§ 44-101(6)).
14 contracts and escrow questions
0 of 14 answered · 0 correct
Question 1 of 14 · Arizona contracts, escrow and title · 13 items
A buyer gives earnest money in the form of a promissory note. Under A.R.S. §32-2151.01(C), what must the broker do?
Answer and explanations
Incorrect: Recording an earnest money note with the county recorder is not required; the statute only asks that its form be stated.
Correct: The broker must state in the purchase contract, lease or earnest money receipt the type of earnest money received: cash, check, promissory note or other item of value.
Incorrect: A promissory note is not cashed like a check; the rule is about stating its form.
Incorrect: A note is a lawful form of earnest money; the duty is to disclose its type.
Question 2 of 14 · Arizona contracts, escrow and title · 13 items
Under A.R.S. §12-548, how long does a party have to sue for breach of a written contract in Arizona?
Answer and explanations
Correct: An action on a written contract must be brought within six years after the cause of action accrues.
Incorrect: Three years is the Arizona limit for oral contracts (A.R.S. §12-543), not written ones.
Incorrect: Ten years is longer than the six-year limit.
Incorrect: Four years is not the written-contract limit in Arizona.
Question 3 of 14 · Arizona contracts, escrow and title · 13 items
A purchase contract lets either side cancel after a written cure notice goes unanswered for the stated cure period. When may the seller cancel without liability?
Answer and explanations
Incorrect: Requiring the buyer to sign a written cancellation misreads the clause: the seller's remedy after an uncured breach does not depend on the buyer's signature.
Incorrect: A better offer is not a breach by the buyer and gives no right to cancel.
Correct: Under such a clause the seller must first deliver the cure notice; only an uncured breach after the period lets the seller cancel.
Incorrect: A binding contract cannot be canceled at will by one side, even before closing.
Question 4 of 14 · Arizona contracts, escrow and title · 13 items
Under A.R.S. §32-2151.02(A), which of these must every Arizona real estate employment agreement contain?
Answer and explanations
Incorrect: The statute requires a definite duration but sets no minimum length.
Correct: The statute requires clear language, all material terms including compensation, a definite duration, and every party's signature.
Incorrect: Signatures are required; notarization is not.
Incorrect: Employment agreements are kept in the broker's files, not filed with ADRE.
Question 5 of 14 · Arizona contracts, escrow and title · 13 items
A seller's listing broker is closing its office and wants to assign the listing agreement to another brokerage. Under A.R.S. §32-2151.02(B), what is needed?
Answer and explanations
Incorrect: ADRE does not approve assignments of private agreements.
Incorrect: Notice is not consent; the seller must agree in writing.
Correct: An employing broker may not assign an employment agreement without the express written consent of all parties at the time of the assignment.
Incorrect: Brokers own their listings, but assignment still needs the parties' written consent.
Question 6 of 14 · Arizona contracts, escrow and title · 13 items
A buyer already has an exclusive buyer-broker agreement with one firm. Before another licensee asks the buyer to sign a second one, what does A.R.S. §32-2151.02(C) require?
Answer and explanations
Incorrect: A 30-day wait appears nowhere in the statute; the safeguard is the buyer's written acknowledgment.
Incorrect: The statute requires the buyer's acknowledgment, not a release from the first firm.
Incorrect: ADRE does not review private employment agreements.
Correct: The licensee must get the party's written acknowledgment that more agreements could expose the party to substantial additional commissions.
Question 7 of 14 · Arizona contracts, escrow and title · 13 items
A seller orally promised a broker a 5% commission, the broker found a buyer and the sale closed, and the seller refuses to pay. Can the broker win a suit for the fee?
Answer and explanations
Incorrect: The buyer's testimony that the broker brought the deal proves procuring cause, but it cannot replace the signed writing.
Incorrect: Performance does not cure the missing writing for a broker's commission.
Incorrect: ADRE does not award commissions; the claim fails in court without a writing.
Correct: A.R.S. §44-101(7) bars a suit on an agreement employing a broker to sell real property for a commission unless it is in writing and signed by the party charged.
Question 8 of 14 · Arizona contracts, escrow and title · 13 items
Under A.R.S. §32-2152, what must a broker allege and prove to sue in an Arizona court for an earned commission?
Answer and explanations
Correct: The complaint must allege, and the plaintiff must prove before the hearing, that the plaintiff was a qualified licensed broker or salesperson when the claim arose.
Incorrect: Arizona does not require E&O insurance, so it is not an element.
Incorrect: Payment between buyer and seller is not an element of the broker's claim.
Incorrect: ADRE does not handle purely civil compensation disputes, so no ADRE step comes first.
Question 9 of 14 · Arizona contracts, escrow and title · 13 items
Both parties sign a purchase contract. Under A.A.C. R4-28-802(A), what must the licensee do next?
Answer and explanations
Incorrect: Contracts are kept in the broker's files, not filed with ADRE.
Incorrect: Purchase contracts are not routinely recorded.
Correct: On execution of a transaction document, the licensee must deliver a legible copy of the signed document and final agreement to each party who signed it.
Incorrect: Delivery is required for every signer, not only on request.
Question 10 of 14 · Arizona contracts, escrow and title · 13 items
The buyer asks the listing agent for the keys three days before closing to start moving in. Under A.A.C. R4-28-1101(J), when may the agent hand them over?
Answer and explanations
Incorrect: The buyer's release does not substitute for the owner's instruction.
Incorrect: Loan approval does not give the agent authority to deliver possession.
Correct: A licensee may not deliver possession before closing unless the owner of the property expressly instructs it.
Incorrect: Earnest money in escrow has nothing to do with early possession.
Question 11 of 14 · Arizona contracts, escrow and title · 13 items
Which closing charge can an Arizona city not add to a home sale under Article 9, Section 24 of the Arizona Constitution?
Answer and explanations
Correct: The Constitution bars the state and local governments from imposing any new tax or fee on the sale or transfer of real property.
Incorrect: County recording fees existed before 2008 and are not a new transfer tax.
Incorrect: A title premium is a private insurance cost, not a government charge.
Incorrect: An escrow fee is a private service charge.
Question 12 of 14 · Arizona contracts, escrow and title · 13 items
Under A.R.S. §11-1133, what must be attached to a deed transferring title when it is recorded in an Arizona sale?
Answer and explanations
Correct: Each deed or sale contract recorded must have an affidavit of value, signed by the buyer and seller or their agents, giving the sale price and terms.
Incorrect: The title commitment is issued before closing and is not recorded with the deed.
Incorrect: Federal loan disclosures go to the borrower; they are not recorded with the deed.
Incorrect: The SPDS is a private disclosure between the parties, not a recording attachment.
Question 13 of 14 · Arizona contracts, escrow and title · 13 items
An Arizona broker holds a buyer's earnest money in the brokerage trust account until closing. Does the broker need an escrow agent license?
Answer and explanations
Incorrect: The exemption comes from the statute, not from a waiver by the parties.
Incorrect: The escrow chapter expressly carves out brokers' earnest money.
Incorrect: The exemption has no dollar limit.
Correct: A.R.S. §6-811(A)(6) exempts licensed brokers who accept earnest money in the regular course of business, as to that money, if they account for it within a reasonable time.
Question 14 of 14 · Arizona contracts, escrow and title · 13 items
Under A.R.S. §6-834(A), where must an Arizona escrow agent keep escrow monies unless all parties instruct otherwise in writing?
Answer and explanations
Incorrect: Even with the parties' instructions, escrow money may never go to an institution outside the United States.
Incorrect: The statute names banks and savings institutions, not investment funds.
Correct: Escrow money goes in a bank, savings bank or savings and loan doing business in the state, kept separate from the agent's own money.
Incorrect: Escrow money must be kept apart from the agent's own funds.
Answer every question to see your score
Escrow in Arizona
Under Arizona law an escrow is a deposit of money, documents or other property with a person who has no interest in it, to be delivered when a stated event happens or an act is performed (A.R.S. § 6-801). The escrow agent is that neutral holder and is regulated under Title 6 as a financial business, not under the real estate chapter. Title insurance and lending in general are national topics: transfer of title, financing.
Form terms are not statutes
Day counts for inspection periods, cure periods and earnest money in an Arizona purchase contract come from the edition of the standard form in use, not from a statute. Learn them from the form your brokerage uses, and don’t carry a form’s number into a question about what the law requires.
Does a listing agreement have to be in writing in Arizona?
Yes, to collect a commission. The statute of frauds covers an agreement employing a broker to buy or sell real property for compensation or a commission (A.R.S. § 44-101(7)).
What does an escrow agent do in Arizona?
Holds the deposit and documents as a neutral party and releases them when the conditions in the escrow instructions are met: escrow in Arizona.
How many contract questions are on the Arizona State exam?
13 across contracts (8) and critical business services (5), per the 2026 State outline.