RE - Texas Promulgated Forms 2021
Is a provision in the contract stating that a certain task must be completed within a "reasonable time" a good idea?
No, because the term is open to so much interpretation.
An amendment and an addendum are essentially the same thing, just different terms that justify the need for a lawyer to review the change in the deal. Is this true?
No, they are different documents, the amendment being needed once the contract has been changed, the addendum being executed at the same time the contract is signed.
Which of the following is NOT a means by which a contract might be lawfully terminated without consequences
Hatred of the buyer by the seller
Your client has a valid and enforceable contract to purchase a prize Arabian stallion. Before the deal closes, the horse breaks its leg and has to be euthanized. The contract is terminated as a result of
Impossibility of performance
After the contract was signed but before closing, it was determined that the name of the buyer should be changed to "Eric Decker and Jesse James Decker, as JTWROS." How should this change be addressed
In an amendment
When all of the parties to a contract agree to terminate, it is said to be terminated by
Mutual Agreement
In which paragraph of the promulgated contracts does the term time is of the essence appear
Option to terminate
One party cancelling or terminating a contract as though it had never been made is...
Rescission
What is the statute of limitations for an oral contract for the six-month lease of a property?
Two years
A person approaches an owner and says, "I'd like to buy your house." The owner says, "Sure" and they agree on a price. What type of contract is this?
Unenforceable
Which of these describes an open listing agreement in which Broker A is entitled to a commission if she sells the property, but the seller or another broker could sell it and pay no commission to Broker A?
Unilateral Contract
When a contract contains all of the essential elements that make it legally sufficient or enforceable and is binding in a court of law, it is..
Valid
When a contract lacks one of the essential elements of a legal contract it is...
Void
Your client has asked you to add time is of the essence to a couple of the provisions of the purchase contract. What is your most appropriate response?
"I'm not sure that is a good idea, but you and the buyer should consult with your attorneys about this."
Which of these promulgated forms includes "time is of the essence"
The six promulgated contract forms
In Texas, the statute of limitations for an oral contract for a lease of less than one year is
Two years
A seller accepted money from a buyer for his unrestricted right to cancel the purchase transaction (option to terminate) within ten days of the executed date of the sales contract. This agreement is a(n)
Unilateral Contract
A contract to perform an unlawful act is considered which of the following?
Void
An agreement entered into involuntarily by a party is
Void
If a loan shark promises you $500 if you will rough up one of his nonpaying customers to encourage prompt repayment, what sort of contract is this?
Void
A buyer's agent discovers after the contract has been signed that the seller's representation that the well delivers 26 GPM (gallons per minute) is false; the seller knows well that the well has never produced more than 2 GPM. The contract is...
Voidable
When a contract appears to be valid but may be rescinded or disaffirmed by one or both parties based on some legal principle it is
Voidable
A contract must meet certain minimum requirements to be considered legally valid. all of the following are essential elements of a valid contract EXCEPT
Earnest Money
Once a sales contract is completed with all parties fulfilling their promises, the ownership changing hands, and the seller receiving the sales price amount, the sales contract is a(n)
Executed Contract
According to the Texas legislature, a contract involving the sale of a residence that will take place more than 180 days after the execution of the contract is
Executory contract
A buyer and seller enter into a contract for the sale of a four-bedroom home. If either party defaults under the contract, the other party has how much time to file a lawsuit for damages?
Four years
The statute of limitations for a written contract for the sale of real estate in Texas is
Four years
The main difference between an amendment and an addendum is that an amendment...
Is a change to the existing content in the contract
An amendment...
Is a change to the original agreement
A buyer and a seller enter into a contract using the Farm and Ranch Contract, which is one of TREC's six promulgated contracts. The effective date of the contract is June 20, and the buyer has 8 days to fulfill a duty under the contract. By when must the buyer complete the duty?
June 28th at midnight
Which of the following is necessary for a valid legal contract?
Lawful Objective
A contract that complies with all the basic requirements may still be either void or voidable. To be void, the contract must have
Mutual Agreement
A claim for fraud accrues
On the date the defendant makes the allegedly false representation
A change in the sales price is dealt with in which paragraph of the TREC-promulgated amendment form?
One
In Texas, the statute of limitations is two years for..
Oral contracts for a lease of less than one year
Contracts may be discharged or terminated whenever the parties agree, along with a written acceptance, that the work performed is close enough to completion and that the contract is discharged even if some minor elements remain unperformed. This is called...
Partial Performance
The real estate agent representing the seller should encourage the seller to
Require as much earnest money as can be negotiated with the buyer.
There are how many essential elements to constitute a valid real estate contract?
Six
The painter contracts to paint the exterior of the home for $1,750 plus the cost of paint and any other necessary materials. About three-fourths of the way through the job, the contractor breaks his leg and can not finish. The owner offers to pay the contract price less deductions for the cost of having the job completed by another painter, and the original painter accepts the offer. The contract has been discharged under the principle of
Substantial Performance
TREC promulgates the Loan Assumption Addendum. In a transaction where a buyer is assuming a seller's loan
TREC's Loan Assumption Addendum is required
A contract becomes fully executed when..
The parties have fulfilled the promises made in the agreement
If the buyer gives notice (without legal justification) that he will not close the purchase of the property and is terminating the contract, is the seller out of luck?
no, termination of the contract does not terminate the seller's remedies under the contract, only the seller's obligation to sell
The offer was signed by the buyer on February 13 and accepted by the seller on February 14, with the acceptance being communicated to the buyer on the same day. When should the agents start counting the 10 days after the effective date of the contract within which the seller must provide a current domestic well yield report
February 15
A buyer and a seller enter into a contract using the One to Four Family Residential Contract, which is one of TREC's six promulgated contracts. The effective date of the contract is February 4, and the seller has 4 days to fulfill a duty under the contract. By when must the seller complete the duty?
February 8 at midnight
The statute of limitations in Texas is...
Four years for a written contract
The two-year statute of limitations under the Texas Deceptive Trade Practice Act, begins to run
From the date when the complaining party discovers or should have discovered the deceptive act
About a week after the effective date of the contract, the buyer and the seller agree to change the closing to a week earlier than the contract provides. You tell your client to mark the change on the original contract, initial it, and it is all set. Is this a good idea?
No, aside from the fact you are required to use the promulgated addendum form, an amendment is not binding unless all parties have signed it.
The contract is signed by buyer and seller, and the earnest money check is delivered to you (as escrow agent) on Friday afternoon. You decide to take Monday off. You come in Tuesday and review the contract, noting that it has been signed and you have had the earnest money since Friday. Is this a concern?
No, because not only does the day of the effective date of the contract not count, the second business day is Tuesday
A contract with a person under duress is...
Voidable
A couple starts celebrating the sale of their home after their listing agent calls them with the news that they've received an acceptable offer. The listing agent says he is coming over to get their acceptance and signatures. However, by the time the agent arrives the sellers are completely inebriated. The agent has them sign the contract and then takes it to the title company. This contract is...
Voidable
If parties to a real estate contract in Texas are held to very strict deadlines for performance, the contract likely includes the phase
"Time is of the essence"
Which of the following would NOT be considered a competent party?
A 30-year old attorney under the influence of marijuana at the time she entered into an agreement.
In Texas, the statute of limitations is four years for
A contract for the sale of real estate
The statute of limitations is four years for which of the following?
A contract for the sale of real estate
A contract may be discharged for any of the following reasons EXCEPT
A unilateral decision by either party to terminate the contract
A breach of contract is defined as
A violation of any terms or conditions of the contract without legal reason or justification.
Which of these addenda does NOT include "time is of the essence"
Addendum for Coastal Area Property
An addendum is...
Additional information given in the offer
The second paragraph of the TREC-promulgated amendment form deals with what type of amendments?
Additional itemized repairs
Which of these is NOT an essential element of a valid contract?
Adequate earnest money
The essential elements of a valid real estate contract include
All of these - Signatures of the parties - Competent parties - Consideration
Which of these addenda includes "time is of the essence"?
All of these: - Addendum for Sale of Other Property by Buyer - Addendum for Back-up Contract - Short Sale Addendum
A contract is said to be bilateral if
All parties on the contract exchange binding promises
A contract is classified as bilateral if...
All parties to the contract exchange binding promises.
A few days after the contract to purchase the condo was signed by both parties, the seller realized he had forgotten to exclude the built-in wine cabinet located in the kitchen. After some negotiation, the parties agree to exclude the cabined and agree on a slight reduction in the price of the property as a result. These items will be addressed in
An amendment
Which of the following is TRUE regarding amendments and addenda
An amendment is completed after a contract has been executed, but addenda are completed at the same time as the sales contract.
To make a change to a contract...
An amendment must be used
The voiding of a contract by a minor is..
An example of terminating a contract by operation of law
A contract that exchanges a promise for a promise is said to be
Bilateral
A legally enforceable agreement under which two parties promise to do something for each other is classified as a(n)
Bilateral Contract
He promises to marry her. She promises to marry him. This is an example of...
Bilateral Contract
A seller and buyer have entered into a sales contract, and the seller fails to deliver title to the buyer. This is an example of..
Breach of Contract
A contract can be discharged or terminated
By impossibility of performance
One party cancelling or terminating a contract without a return to the original position is...
Cancellation
Once a contract has been agreed upon and signed by all parties
Changes must be addressed through the use of an amendment
An amendment
Changes the contract
Which of the following is required for a valid contract
Consideration
The promise given in exchange for a promise in a contract and services as the contract's
Consideration, which is an essential element of a valid contract
A valid legal contract must have
Legally competent parties
Under the statute of frauds, all contracts for the sale of real estate must be
In writing to be enforceable
In terms of contract law, one description for a 15-year old would be
Legally incompetent
Which of these promulgated forms does NOT include "Time is of the essence"?
Loan Assumption Addendum
A contract may be discharged under substantial performance when
One party does not complete all the details exactly as the contract requires but has to a large extent performed on the contract, which may be enough to force payment
Your rebellious 15-year old daughter signs a lease for her own apartment. You convince her to cancel it, which she does. You notify the apartment owner not to bother to try to enforce the lease because it has been terminated by
Operation of law
"Time is of the essence" in real estate contracts means...
Parties are held to exact performance of their duties within the time specified in the agreement.
________ means doing what the contract requires, and ________ means not to do a specific thing.
Performance, Forbearance
The contract, which has an added "time is of the essence" clause, requires delivery to the buyer (your client) of a detailed inventory of cattle and farm equipment no later than noon, February 14, 2019. The seller rushes into your office on the 14th at 1:30pm, with a complete list. Which of the following is TRUE in this situation
The buyer can claim breach of the contract and receive back the earnest money previously paid
A buyer and seller enter a contract for the sale of a 3-bedroom residential property. Shortly after the contract is in place, the buyer has an inspection done. As a result of the inspection, the buyer wants the seller to fix the fence and replace the garage door opener. The seller agrees. How should the parties proceed?
The parties may use an amendment form.
The seller fails to abide by the rule requiring the seller to provide the buyer the Condo Resale Certificate before the contract is signed, and the seller later receives a better offer. The seller says the contract is voidable due to the failure to provide the certificate, and the seller is therefore free to accept the better offer. The buyer does not want to cancel the contract. Which of these statements is TRUE in this situation?
The seller must abide by the contract if the buyer so elects.
Which of the following is TRUE for the statue of limitations for contracts for the sale of real estate and oral contracts for leases of less than one year
The statute of limitations is four years for the sale and two years for the lease
Your 17-year-old son signs the notes and contract to purchase a condo so he can move out of the house. He provides the earnest money he has been saving from his part-time job and says his uncle will provide the financing. You inform him the contract is void and he won't be able to go through with the deal. You are...
Wrong. The contract is voidable at the election of the minor, but it is not void.
After a real estate sales contract is signed but before title actually passes, the status of the contract is
Executory
When a contract appears to be valid on the surface but neither party can sue the other to force performance it is..
Unenforceable
"Lost. Our priceless pet, 3-year old Bull Mastiff, 175 lbs..., answers to 'Chloe." $125 reward, no questions asked." What kind of contract is this?
Unilateral
The office manager at your brokerage tells the sales associates that the first agent who closes $500,000 or higher transaction in June will be paid a bonus of $3,500 over and above whatever the agent's usual commission is. What kind of contract is this?
Unilateral Contract
With a verbal agreement, you lease your garage to your neighbor from January 1, 2018, to September 1, 2018, to store his car. He promises to pay the rent in a lump sum no later than January 3, 2018. He does not pay. How long do you have to file suit to collect?
Until January 2, 2020
A(n) ____ contract is a contract that is deemed never to have existed, whereas a(n) ______ contract may be a valid contract, but there is no legal way to see that its terms are performed.
Void, unenforceable
If I, as agent for the buyer, tell you, as seller that my client is extremely wealthy and can pay cash for the property if she wants, when in fact she is broke and cannot begin to qualify for a purchase loan, the contract is...
Voidable by you because it was based on fraud
When is the effective date entered on the contract form?
When the last party signs the form and the other party has been notified of the acceptance