Contracts I, II, III

The Latin term for "Let the seller beware" is A. Caveat emptor. B. Caveat venditor. C. Novus ordo seclorum. D. Annuit Corptis.

Caveat venditor

A property is considered transferred from the grantor to the grantee the A. date the grantee signs the deed. B. date the grantor and grantee signs the deed. C. date the deed is recorded at the recording office. D. date the grantor delivers the signed deed and the grantee accepts the deed.

Date the grantor delivers the signed deed and the grantee accepts the deed

Which of the following would NOT terminate a listing contract? A. Death of the principal broker B. Death of the buyer C. Death of the seller D. Destruction of the property

Death of the buyer

Which of the following is NOT required to create a valid sales contract? A. Competent parties B. Earnest money C. Signatures of the parties D. Offer and acceptance

Earnest money

Time is of the essence means A. everything must be performed within the time frame specified. B. the buyer has three days to rescind the contract after closing. C. contingencies in the contract do not have to be met until after closing. D. the agent will be paid as soon as the seller accepts the offer.

Everything must be performed within the time frame specified

Which of the following would NOT be associated with offer and acceptance? A. Mutual assent B. Meeting of the minds C. Exact terms and conditions D. Fee simple absolute

Fee simple absolute

The buyer's offer was accepted contingent upon the buyer securing financing. The buyer could not secure a loan. The contract would be terminated because of the A. assignment. B. substantial performance. C. partial performance. D. impossibility of performance.

Impossibility of performance

A buyer made a written offer on a property for $100,000 in which the price was to include the refrigerator. The sellers had 24 hours to accept the offer. Ten hours later the sellers wrote a counter offer of $100,000, excluded the refrigerator, and gave the buyers 24 hours to accept the offer. Ten hours later the sellers decided to accept the original offer and stated that in writing to the buyers. What is the status of the buyer's original offer? A. It is valid. B. It is void. C. It is voidable. D. It is executed.

It is void

When a lease has been assigned, the assignee becomes the new A. lessor. B. lessee. C. property manager. D. salesperson.

Lessee

Under normal circumstances, which of the following contracts would NOT be assignable? A. Listings B. Options C. Mortgages D. Leases

Listings

XYZ Realty listed a property and ABC Realty had a buyer who made an offer. In the counteroffer, the seller would be the A. offeror. B. offeree. C. assignor. D. assignee.

Offeror

A contract must be entered into freely, without duress, threats, blackmail or fraud. The term that best describes this is A. legality of purpose. B. proper legal form. C. reality of consent. D. offer and acceptance.

Reality of consent

The broker and seller reached an agreement to release each other from the listing contract and to terminate the contract. The term that BEST describes this action A. specific performance. B. rescission. C. redemption. D. redlining.

Rescission

Which of the following laws requires a real estate sales contract to be in writing? A. Statute of Limitations B. Statute of Frauds C. Statute of Sales Contracts D. Parol Evidence Rules

Statute of Frauds

Agent Branham's buyers made a written offer of $150,000 for a property that was listed for $155,000. They wrote an earnest money check for $10,000. If the seller accepts the offer, the consideration will be A. $150,000 B. $155,000 C. $140,000 D. $10,000

$150,000

Under the mail box theory A. a contract becomes effective when the offeree deposits the acceptance in the mail box. B. the withdrawal of an offer becomes effective when the offeree deposits the withdrawal in the mail box. C. emails are not permitted between the buyer, seller and agents. D. a contract is not accepted until it is postmarked.

A contract becomes effective when the offeree deposits the acceptance in the mail box.

Which of the following is an example of an executory, bilateral contract? A. Lease B. Sales contract C. Exclusive-right-to-sell listing D. All of the above

All of the above

What is the major difference between assignment and novation? A. An assignment is the transfer of a right, title or interest in a contract, while a novation is the substitution of one contract for another and when given releases liability. B. An assignment is the substitution of one contract for another and when given releases liability, while novation is the transfer of a right, title, or interest in a contract. C. An assignment is used in listings, while novation can only be granted by a lender. D. An assignment is used by lenders, while novation is only granted in listings.

An assignment is the transfer of a right, title or interest in a contract, while a novation is the substitution of one contract for another and when given releases liability.

Offer and acceptance, mutual assent and meeting of the minds refers to A. an essential element of a contract. B. the Statue of Frauds. C. a means by which a contract can be terminated .D. the consideration that is necessary to create a contract.

An essential element of a contract.

Which of the following statements about contract clauses is false? A. A contingency clause in a contract will allow one or more parties to walk away from the contract if the contingency cannot be met. B. A liquidated damage clause in a contract means that compensation will be paid if one party breaches the contract. C. An exculpatory clause is a hold harmless clause. D. An indemnification is an agreement to compensate someone for a gain.

An indemnification is an agreement to compensate someone for a gain.

Which of the following is FALSE regarding option contracts? A. The seller is known as the optionor; the buyer is known as the optionee. B. An option contract is a bilateral contract, but once it has been exercised it is a unilateral contract. C. The option money is normally not a part of the purchase price. D. An option contract must contain the names of the parties; the location of the property; terms of the sale; expiration of the option; method of notification if the option is exercised; and provisions for the option money if the option is not exercised.

An option contract is bilateral contract, but one it has been exercised it is a unilateral contract.

Specific performance means A. there is a specific act which must be performed to complete a contract. B. an order from a court requiring the completion of a contract. C. an order from a court requiring a seller to accept an offer. D. a specific act which must be performed to create a contract.

An order from a court requiring the completion of a contract.

Which of the following is NOT an essential element of a contract? A. Time is of the essence B. Consideration C. Competent parties D. Offer and acceptance

Time is of the essence

An agent called a seller and informed him of an offer from a buyer. The seller agreed to accept the offer. At this point the offer is A. executed. B. voidable. C. unenforceable. D. valid.

Unenforceable

A contract that is missing an essential element is classified as A. valid. B. void. C. voidable. D. enforceable.

Void

Agent Keith just presented the buyers' offer to the sellers. The sellers accepted in writing. At this point the contract is a/an A. unilateral, executed contract. B. bilateral, executed contract. C. implied, executory contract. D. bilateral, executory contract.

bilateral, executory contract

The buyer's interest in a land contract or sales contract is called an A. executory interest. B. executed interest. C. equitable interest. D. indefeasible interest.

equitable interest

The legal description that would MOST LIKELY be used to describe a vacant city lot is a/an A. government survey. B. metes and bounds. C. lot and block. D. monument description.

lot and block

John told his neighbor, "If you ever decided to sell your property, I'd like to be told about it prior to anyone else." If the neighbor agrees they just created a/an A. option contract. B. lease option. C. right of first refusal. D. right of adjacent property.

right of first refusal

A buyer purchased a home and the property disclosure statement indicated the basement did not leak. Upon the first rain, the basement leaked. If the seller committed fraud when filling out the property disclosure statement, the status of the contract is A. valid. B. voidable. C. void. D. unenforceable.

voidable