Final answer:
If a building under a real estate contract burns down, the most likely result is the termination of the listing contract by operation of law since the property no longer exists and cannot be transferred to a buyer.
Step-by-step explanation:
If a building listed on a real estate contract burns down, this would likely result in termination of the listing contract by operation of law. This is because the subject of the contract, the building, no longer exists in the form that was agreed upon for sale. The destruction of the property makes the contract unfulfillable, as the owner cannot deliver possession of a residence that does not exist. Therefore, option 'a' is the correct answer: the listing agreement would be terminated by operation of law.
The other options listed, such as a reduction of the price based on the accrual method of depreciation (b), or payment of compensation as part of the insurance settlement (c), do not apply directly in the case of total destruction. Option (d), which suggests termination by acts of the parties suggesting arson, is speculative and would require an investigation and legal conclusion beyond the immediate effect of the building's destruction.