Bob Brooks National Contracts Exam Questions

A seller and buyer enters into a written agreement. This creates: Select one: a. A contract b. An agency relationship c. An assignment d. An estoppel

a. A contract

An executory contract can be described as: Select one: a. A contract in which one or both parties has not yet performed. b. A contract in which all parties have acted. c. A contract where one of the parties is found incompetent. d. A contract that has expired.

a. A contract in which one or both parties has not yet performed.

A counteroffer is: Select one: a. A rejection of the initial offer. b. A continuation of the initial offer. c. An amendment to the initial offer. d. Not allowed by law.

a. A rejection of the initial offer.

What is not an essential element of contract? Select one: a. Acknowledgement b. Legal Objective c. Consideration d. Capacity

a. Acknowledgement

Once a contact has been fully accepted, which is true: Select one: a. Buyer obtains equitable tile b. Property is no longer available for others to express interest or acquire c. Seller obtains equitable title d. Seller may back out at any time for any reason

a. Buyer obtains equitable tile

What happens to a salesperson's listings if he transfers to a new broker? Select one: a. Listing stays with old broker. b. Listing goes to new broker. c. Listing agreement is void. d. Listing agreement is voidable.

a. Listing stays with old broker.

An offer is made to a seller and the seller makes a counteroffer. Prior to the buyer accepting the counteroffer, the seller receives a better offer from another prospective buyer. Under these circumstances, the seller: Select one: a. May withdraw the counteroffer. b. Should advise the second offeror to wait. c. Can accept the second offer without recourse. d. Is bound by the terms of the counteroffer.

a. May withdraw the counteroffer.

An offer is made to a seller. Prior to acceptance of the offer, the buyer finds another house he likes better and cheaper. The buyer: Select one: a. May withdraw the offer. b. May not make an offer on the second house until the first offer is rejected. c. Can make an offer on the second house without recourse from the first seller. d. Is bound by the terms of the original offer.

a. May withdraw the offer.

Broker and seller disagree on a listing but neither can find a way to terminate the contract. What will terminate the listing agreement? Select one: a. The house burns to the ground b. Listing agent dies. c. The seller removes the brokers sign out of the yard. d. The seller tells the broker the listing agreement is terminated.

a. The house burns to the ground

A contract that cannot be completed because of "impossibility of performance" would best be illustrated by: Select one: a. The object of contract was destroyed by fire. b. Misrepresentation took place in the contract negotiations. c. One of the principals was drunk when they signed. d. One of the principals was a minor.

a. The object of contract was destroyed by fire.

An offer is accepted for $210,000 then another offer is made. The second offer is: Select one: a. Legally binding b. A backup c. Void d. Not important to the seller

b. A backup

How can you put stop on a contract that would NOT harm the buyer? Select one: a. Escape Clause b. Contingency c. Escalator Clause d. Right of First Refusal

b. Contingency

Broker gets a listing through an associate broker. Which would NOT terminate the listing? Select one: a. Death of broker. b. Death of associate broker. c. Death of seller. d. Property destroyed.

b. Death of associate broker.

A listing agreement is entered into with an associate broker. What will not terminate the listing agreement? Select one: a. Death of the principal broker b. Death of the associate broker c. Death of the seller d. Destruction of the property

b. Death of the associate broker

A contract in which title is NOT transferred until all terms have been met is a(an)? Select one: a. Purchase agreement b. Installment land contract c. Lease d. Right of first refusal.

b. Installment land contract

Broker is least excited about an exclusive agency than an exclusive right to sell because: Select one: a. Probably would not be put in MLS. b. Not spend time and resources marketing the property because the commission is in question. c. Too much work. d. The broker would rather an exclusive agency.

b. Not spend time and resources marketing the property because the commission is in question.

Another name for an owner in a listing is: Select one: a. Customer b. Principal c. Agent d. Sub-agent

b. Principal

What legal concept dictates that contracts should be in writing? Select one: a. Appropriation b. Statute of frauds c. Escheat d. Statute of writing

b. Statute of frauds

A buyer and seller have entered into a valid contract. Which of the following would have NO legal effect on the contract? Select one: a. The buyer is unable to qualify for the loan because interest rates increase after contract ratification. b. The seller dies prior to closing. c. The state condemns the property for environmental reasons. d. The lender, holding the current mortgage, forecloses.

b. The seller dies prior to closing.

A contract written that violates the law would be: Select one: a. Voidable. b. Void. c. Inert. d. Unenforceable.

b. Void.

A real estate agent notices that a person is signing for another on a contract. The agent should: Select one: a. Refuse to accept the contract. b. Call the sheriff. c. Ask if they have authority to sign. d. Initial next to the signature as a witness.

c. Ask if they have authority to sign.

After a contract has been accepted by both parties, they decide to withdraw the contract. Which would NOT be a valid reason for either party to accept this? Select one: a. Chain of Title was broken and would take several months to recover. b. Fire damage. c. Buyer finds a better offer. d. Buyer could not receive financing.

c. Buyer finds a better offer.

Which of the following is required for a contract to be valid? Select one: a. In writing b. An earnest money deposit c. Consideration d. Signature and seal of a notary of public

c. Consideration

A buyer makes an "irrevocable offer." After giving it to his agent he changes his mind and wishes to withdraw it. He may get out of this offer . . . . Select one: a. Within 3 business days b. Within 48 hours c. If his agent has not delivered it yet. d. Within 5 business days

c. If his agent has not delivered it yet.

An oral contract for the sale of real estate would NOT be enforceable because: Select one: a. Federal law doesn't allow it. b. It will be too hard to figure out who is telling the truth. c. It does not conform to the Statute of Frauds. d. It would be impossible.

c. It does not conform to the Statute of Frauds.

A listing agreement belongs to whom? Select one: a. Both broker and salesperson b. The salesperson c. The broker d. None of the above.

c. The broker

When does a purchase agreement become a valid contract? Select one: a. When agreement is signed, notarized and recorded. b. When agreement is signed and dated. c. When all parties have signed and been notified of the signing of the other party. d. When agreement is signed and notarized.

c. When all parties have signed and been notified of the signing of the other party.

Which of the following statements is TRUE regarding the acceptance of offers? Select one: a. Revocable offers are considered accepted only upon receipt by the offeree, but irrevocable offers are accepted as soon as they are signed and transmitted by the offeror. b. Once the offeror transmits the revocable offer it is binding on the offeree, but the irrevocable offer is binding in the offeror only after the offeree receives it. c. All offers are considered accepted when signed by the offeree, providing the date and time of the signing are noted on the contract. d. An irrevocable offer is not considered accepted until a signed offer is received by the offeror, but a revocable offer is considered accepted when a signed offer is transmitted by the offeree.

d. An irrevocable offer is not considered accepted until a signed offer is received by the offeror, but a revocable offer is considered accepted when a signed offer is transmitted by the offeree.

A listing agreement will automatically terminate: Select one: a. If the listing broker goes bankrupt. b. On the date specified in the listing agreement. c. If the seller dies prior to receiving an offer. d. Any of the above.

d. Any of the above.

A listing agreement MUST contain all of the following information EXCEPT: Select one: a. The signature of the owner of the property. b. The percentage or amount of the commission. c. The expiration date. d. The net amount that the seller will receive.

d. The net amount that the seller will receive.

What happens to an offer if either party dies or becomes incapacitated before acceptance? Select one: a. If irrevocable, the offer is valid until the irrevocable period runs out. b. The offer is open to the deceased party's heirs. c. The offer is binding on the deceased party's heirs. d. The offer is terminated.

d. The offer is terminated.

Counter-offer is a _____. Select one: a. Rejection b. Amendment c. Acceptance d. Enhancement

a. Rejection

An owner lists his house with a brokerage through a salesperson. Which would NOT terminate the listing? Select one: a. Salesperson dies. b. Broker dies. c. Seller dies. d. House burns to the ground.

a. Salesperson dies.

A minor will reach majority in 30 days. The minor signs a purchase agreement to be closed in 45 days. The contract is: Select one: a. Valid b. Void c. Voidable d. Unenforceable

c. Voidable

A listing agreement may be terminated by: Select one: a. The seller b. The selling broker c. The salesperson who obtained the lising d. Death of the Broker

d. Death of the Broker

A contract can be all of the following EXCEPT: Select one: a. Void b. Voidable c. Valid d. Involuntary

d. Involuntary