IREM Certified Property Manager (CPM) Practice Test

Question: 1 / 400

Which of the following should be included in a contract to ensure enforceability?

A verbal agreement with the contractor

Terms regarding renewal or cancellation penalties

Including terms regarding renewal or cancellation penalties in a contract is essential for ensuring enforceability. These terms provide clarity on the obligations and rights of both parties should circumstances change during the contract's duration. By specifying the penalties tied to renewal or cancellation, the contract sets a clear framework for how and when either party can terminate the agreement, as well as what consequences will follow. This level of detail reduces ambiguity and minimizes the chance of disputes, thereby enhancing the strength and validity of the contract.

Other choices, such as a verbal agreement with the contractor, lack the necessary formality typically required for enforceability. A general overview of services provides insufficient detail, and merely including information about previous contracts does not establish the terms of the current agreement to satisfy legal standards for enforceability.

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A general overview of services

Information only about previous contracts

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