Future Business Leaders of America (FBLA) Business Law Practice Exam

What is the term for a written instrument that transfers the title of ownership of property?

1. Default

2. Deed

3. Contract

4. Agreement

The correct answer is: Deed

The correct answer is the term "Deed," which refers to a legal document specifically used to transfer ownership of real property from one party to another. A deed conveys the title of property, ensuring that the new owner has legal claim and can exercise rights associated with that ownership. Deeds must typically be executed in writing and signed by the parties involved, and they undergo specific processes, such as notarization and recording with the appropriate governmental body, to be effective and enforceable. This makes a deed a crucial instrument in real estate transactions. In contrast, while a contract establishes an agreement between parties, it doesn't inherently convey ownership rights; it may outline terms for future transactions or conditions under which ownership might change. Similarly, an agreement is a broader term that can refer to any mutual understanding between parties, and "default" typically relates to the failure to fulfill contractual obligations, rather than the transfer of ownership. Thus, understanding the specific legal functions and terminology is important in the context of property ownership and real estate law.