Unit 11: Deceptive Trade Practices and Consumer Protection Act Quiz

What is required for a real estate agent to be subject to the DTPA? A) That the agent failed to disclose something he had no knowledge of B) That the agent provided advice, judgment, or opinion C) That the agent made an express misrepresentation that is not advice or opinion D) That the agent engaged in an innocent act of omission

c

When is a waiver enforceable under the DTPA? A) Oral or written waiver by consumer's attorney, and consumer has bargaining power B) Express oral or written waiver by consumer C) Written waiver signed by the consumer, represented by an attorney, and consumer has bargaining power D) Written waiver signed by consumer's attorney, and consumer has bargaining power

c

Which of the following is FALSE regarding a defendant's response to a demand letter? A) A defendant may request to inspect the goods that are the subject of the consumer's action at a reasonable time and a place. B) A defendant may request to inspect the goods that are the subject of the consumer's action in a reasonable manner. C) A written request to inspect the goods that are the subject of the consumer's action may be presented to the consumer. D) A verbal request to inspect the goods that are the subject of the claim must be honored

d

Which of the following is a required element of fraud? A) Opportunity for profit B) False statements about a person C) Breach of warranty D) Intention to deceive

d

Consumers are protected under DTPA from A) all of these actions. B) false, misleading, and deceptive practices. C) breaches in warranty. D) unconscionable actions.

a

If an act is done knowingly under the DTPA, up to what amount of monetary damages can the consumer collect? A) Not more than three times economic damages B) Not more than three times mental anguish damages C) Mental anguish damages only D) Economic damages only

a

In a cause of action under the DTPA, consumers are required to prove that the A) misleading or deceptive act was a substantial factor to their injury. B) misleading or deceptive act directly caused their injury. C) consumer relied on the misleading or deceptive act. D) misleading or deceptive act related to a material fact.

a

Mark is a sales agent representing a seller under a listing agreement. Anna knows that the house has plumbing problems, and she hears the seller tell a buyer that the house has no problems. Which if the following is a TRUE statement regarding Mark's culpability if the buyer sues him for statutory fraud? A) Mark is liable if he stood to benefit from the misrepresentation. B) Mark is not liable because he did not make the statement, the seller did. C) Mark is liable only under common law fraud, not statutory fraud. D) Mark is not liable if he proves that he is the seller's agent.

a

Rosie Ruiz, a listing associate with Camp Zama Realty, does not mention to a prospective buyer that the 100-acre tract of land might soon be incorporated within the city limits. The announcement was in the local paper that morning. Rosie had not read about it because she seldom bothers to read the paper. Rosie has A) misrepresented by omission. B) misrepresented and committed fraud. C) committed fraud. D) misrepresented by commission.

a

Under DTPA, "economic damages" includes compensatory damages for A) cost of repair/replacement. B) physical impairment. C) loss of companionship. D) pain and anguish.

a

Under DTPA, "economic damages" includes compensatory damages for A) cost of repair/replacement. B) physical impairment. C) pain and anguish. D) loss of companionship.

a

Under what condition can a defendant be held liable for failing to disclose a material defect? A) The defendant must have actual knowledge of the defect. B) A defendant need not have knowledge of the defect. C) The defendant knew or should have known of the defect. D) The defendant only should have known of the defect.

a

Which of the following is a TRUE statement? A) The DTPA prohibits both misrepresentations and omissions to consumers that cause harm. B) The DTPA prohibits misrepresentations, but not omissions, to consumers that cause harm. C) The DTPA prohibits neither misrepresentations nor omissions to consumers that cause harm. D) The DTPA prohibits omissions, but not misrepresentations, to consumers that cause harm.

a

Which of the following is an example of the kind of relief a consumer can get under the DTPA? A) All of these B) An order rescinding the contract C) An order enjoining the failure to act D) An order enjoining the action

a

A sales agent represents a seller under a listing agreement. If the seller tells her sales agent that the house was recently treated for termites, what should the agent do with the information to limit her liability under the DTPA? A) The sales agent should call the buyer's agent and give her the information. B) The sales agent should get a copy of the treatment report and attach it to a notice that states the agent was relying on the report. C) The sales agent should call the buyer's agent, tell her about the treatment, and tell her that she should independently walk around the property and look for signs of treatment. D) The sales agent should call the buyer's agent, tell her about the treatment, and tell her that she has no reason to believe the owner.

b

According to case law interpreting the professional services exemption to the DTPA, what type of statement is NOT covered by the professional services exemption? A) A statement of opinion B) A statement of fact C) A statement of advice D) A statement of judgment

b

An email from a broker offering a rebate in a case where the broker did not, in fact, pay the rebate after closing is which of the following? A) An implied misrepresentation of material fact B) An express misrepresentation of material fact C) An implied representation of objective fact D) An express representation of subjective fact

b

In order to collect economic damages under the DTPA, what must the consumer show? A) That the person made a knowingly false statement, and the consumer had actual awareness of its falsity B) That a person made a false statement, and the consumer relied on the statement C) That a person made a false statement, and the consumer knew it was wrong D) That the person made a false statement, and the consumer did not rely on the statement

b

In the past, what settlements were consumers able to obtain under DPTA when they suffered because of defective or unworkmanlike construction in a new-home purchase? A) Actual damages B) Three times the amount of actual damages C) Five times the amount of actual damages D) Two times the amount of actual damages

b

Janie is a sales agent representing a seller under a listing agreement. Janie knows that the house has plumbing problems but fails to disclose such problems to potential buyers. Which of the following is a TRUE statement regarding Janie's culpability if the buyer sues her for negligence? A) Janie is not liable for negligence because her fiduciary duties are to the seller. B) The fact that Judy represents the seller is a defense to negligence. C) A buyer need not prove that Janie owed a duty to him. D) A buyer must show that Janie has a duty to disclose the information to him.

b

Misrepresentation cases against license holders are governed by the Texas Deceptive Trade Practices Act (DTPA) and A) the State Bar of Texas. B) The Real Estate License Act. C) the Affordable Housing Commission. D) the Department of Community Affairs.

b

Misrepresentation does NOT always include A) a false statement. B) the intention to deceive. C) another's decision to contract. D) two parties.

b

Randy is a sales agent representing a seller under a listing agreement. Randy knows that the house has plumbing problems but tells a buyer that the house has no problems. Which if the following is a TRUE statement regarding Randy's culpability if the buyer prevails in a suit for statutory fraud? A) Randy has a defense that he was acting as an agent. B) Randy made the misrepresentation to induce the buyer into purchasing the home. C) The buyer does not need to show that he was harmed as a result of the misrepresentation. D) Randy's intent is irrelevant in a fraud action.

b

Reliance is an element of which of the following cause(s) of action? A) The DTPA and statutory fraud B) All of these C) Common-law fraud and statutory fraud D) Common-law fraud, statutory fraud, and the DTPA

b

Seller John has listed his home with broker Bella. John tells Bella that a recent death on the property was due to a suicide, when in fact it was a homicide. Who is potentially liable for a civil suit under the DTPA if Bella does NOT disclose the death to a potential buyer? A) Neither B) Only seller John C) Both broker Bella and seller John D) Only broker Bella

b

The Texas Supreme Court has ruled that for an "as is" agreement to be enforceable, it must pass several tests, one of which is A) both parties be represented by attorneys. B) known defects must be disclosed by the seller. C) buyer and seller in relatively unequal bargaining positions. D) the seller's obstruction of the buyer's attempt to inspect.

b

Thomas is a commercial broker. He is representing the buyer in the purchase of an apartment complex in Dallas. Thomas also represents the seller. Both have authorized intermediary. The seller's attorney discloses to Thomas via email that the property has a serious foundation issue. Thomas forgets to pass the information on to the buyer, and the buyer ends up purchasing the property, unaware of the foundation problems. Will Thomas likely be liable to the buyer for negligence? A) No, brokers acting as intermediaries have limited liability to buyers. B) Yes, Thomas owes the buyer a duty of disclosure of material facts. C) No, he will only be liable for fraud. D) Yes, if the buyer can show that Thomas acted intentionally.

b

What does intentionally mean under the DTPA? A) Actual awareness that the act was illegal and actual awareness that the act was false B) Actual awareness of the falsity of the deceptive act and intent that the consumer act in detrimental reliance on the act C) Actual awareness that the act was false and legal D) Subjective awareness that the act was illegal

b

Which contract used in the real estate business contains an "as-is" provision? A) The TAR Exclusive Buyer/Tenant Representation Agreement B) The TREC-promulgated contract C) The Seller's Disclosure Notice D) The TAR Residential Exclusive Listing Agreement

b

Which of the following is NOT a relief for damage under the DTPA? A) Rescission of a contract B) Revocation of the broker's license C) Money damages D) Cancellation of the broker's commission

b

Which of the following is an example of the kind of relief a consumer can obtain under the DTPA? A) A rejoinder order B) An order enjoining the action C) A stipulating order D) An in rem order

b

Which of the following practices is a violation of the Deceptive Trade Practices Consumer Protection Act (DPTA)? A) Waiting until a prospective buyer sees a property before telling her about the industrial view from the kitchen B) Failing to tell the seller that a broker is receiving commission from the buyer C) Telling a seller that a property should sell from $200,000, when it sells for $180,000 D) Screening prospective buyers to comply with the sellers wish to sell to women only

b

Which of the following statements regarding a consumer's waiver of DTPA protection is FALSE? A) It must be in writing and signed by the consumer. B) It must be in writing and acknowledged by the defendant. C) The consumer is represented by an attorney. D) The consumer is not in a significantly different bargaining position.

b

A person notifies a broker that a lawsuit has been filed against the broker for violations of the DTPA. The notice goes on to say that someone will be in touch with the broker soon, and the broker should be ready to provide the person $10,000. The broker has no idea who the person is or why a demand letter was sent. The broker tries to get in touch with the person, but it is difficult because there is no return address, although there is an email address. What should the broker do? A) The DTPA requires that he publish in a local newspaper a response requesting additional information and the cause number for the lawsuit. B) He should prepare the money and wait to hear from the person, because paying the amount demanded is worth the time and trouble defending a lawsuit. C) Nothing, the broker has not been notified of a lawsuit, and if he cannot get in touch with the person who sent the letter, he cannot request to inspect anything. D) He should email the person and demand that the person prove that he is a consumer with a written, signed affidavit, which is a prerequisite to recovery under the DTPA.

c

An enforceable waiver of rights to sue under DTPA would require that A) the consumer and the defendant be in relatively equal bargaining positions. B) the waiver be in writing and signed by the consumer. C) all these conditions be met to have an enforceable waiver of rights. D) the consumer be represented by legal counsel.

c

Intent is an essential element of which of the following causes of action? A) The DTPA and statutory fraud B) The DTPA only C) Common-law fraud and statutory fraud D) Common-law fraud, statutory fraud, and the DTPA

c

Karen is a broker who represented a seller, Cory, under a listing agreement wherein Cory sold some property to a buyer, Frank. Frank is extremely unhappy with the outcome of the transaction because he discovers major defects in the property and suspects that Karen and Cory conspired to defraud him. After discovering several defects, Frank immediately files a lawsuit against Cory and Karen alleging, among other things, violations of the DTPA. What was Frank required to do before filing suit against them under the DTPA? A) Frank must verify that he is a consumer as defined in the DTPA and file such verification in the court in which the lawsuit will be filed. B) Frank must first file a complaint with TREC against Karen. C) Frank must send a demand letter to Karen and Cory advising them of the complaint and the amount of damages he has suffered. D) Frank must first file a complaint with TAR against Karen and Cory

c

Not more than three times economic damages are the maximum amount collectible by a consumer for what kind of action? A) A false, misleading, or deceptive act done intentionally B) A false, misleading, or deceptive act C) A false, misleading, or deceptive act done knowingly D) A false, misleading, or deceptive act done objectively

c

Shelby is an associate broker with Ace Realty, and she is representing a buyer by oral agreement in the buyer's purchase of raw land. Shelby has advised the broker on several transactions in the past, so the buyer trusts her to provide him with good advice. Shelby tells the buyer that she thinks the purchase is a good investment for commercial development because she has analyzed recent raw land purchases in the area that are going for much more because a tollway will be going up near the location of the land. In fact, once the purchase has closed and funded, the buyer learns that the property will be condemned by the state because it needs the property for the tollway right of way, so the buyer sells the property to the state for a loss. If the buyer sues Shelby, is Shelby likely liable under the DTPA? A) Yes, the exemption only applies to license holders in residential transactions. B) No, Shelby's statement was an express misrepresentation, but it was not material. C) No, not if Shelby's statement is considered advice or opinion and not an express misrepresentation or unconscionable action. D) Yes, Shelby does not have a written agreement, so the exemption for real estate agents does not apply.

c

Under DTPA, "documentary material" would include all of the following EXCEPT A) a tape recording of phone conversations. B) a rough draft of the buyer's representation agreement with the broker. C) hearsay conversation. D) notes made on napkins at a restaurant.

c

What are economic damages under the DTPA? A) Compensation for mental anguish B) Compensation for physical pain C) Compensation for pecuniary loss D) Compensation for exemplary damages

c

Which of the following is an example of a defense against a DTPA lawsuit that was unsuccessfully claimed by a defendant? A) The consumer does not waive a DTPA claim by a consumer accepting a defective home. B) A consumer is barred from filing a DTPA claim because an examination of county records could have disclosed the defendant's deception. C) The consumer waives a DTPA claim by a consumer accepting a defective home. D) A DTPA lawsuit is groundless if a written agreement limiting a defendant's liability for repair of a defect to a set amount that is less than an expert's estimate of the cost of repairing the defect.

c

Who has standing to sue under the DTPA? A) A business entity B) A child C) A consumer D) A person

c

A recent buyer is making a claim of misrepresentation because the property taxes on his newly purchased home are far higher than was disclosed by the seller. Could the broker be liable on this claim? A) No, because taxes are required on all properties and are not considered damages. B) No, because the seller has responsibility for making accurate tax disclosures. C) Yes, brokers are liable in all cases of damages, regardless of the cause. D) Yes, the broker cannot claim that she merely passed along information from the seller.

d

A recent homebuyer believes that she overpaid for a property because no one informed her that a nearby vacant lot was being rezoned for commercial use. A discount hotel is planned for the site. The broker said he did not think that information was relevant to the buyer. Which of the following must the homebuyer prove in order to make a misrepresentation claim against the broker? A) The owner ordered the broker to conceal the rezoning information. B) The broker failed to ask her if having a hotel nearby would concern her. C) The broker and the owner conspired to withhold the rezoning information. D) The broker owed a duty to the homebuyer to disclose the rezoning information.

d

An example of breach of warranty under DTPA might be A) a new-home builder who refuses to repair a defective wall stud discovered by the homeowner two months after moving in. B) a new-home builder who fails to repair/replace a dishwasher that floods the basement the night the new residents move in. C) the air-conditioning company that refuses to return calls to a homeowner about the defective air-conditioning unit just installed by the company. D) all are examples of breach of warranty.

d

How does a consumer prove that a person's false or misleading act was the producing cause of his harm? A) By showing that the defendant breached his duty B) By showing that the defendant intended to harm the consumer C) By showing that the defendant owed the consumer a duty D) By showing that the consumer relied on a person's false or misleading act to the consumer's disadvantage

d

If the consumer can prove that the act was done knowingly, the consumer may recover not only economic damages, attorney fees and court costs but also damages for mental anguish up to A) twice the economic damages. B) four times the economic damages. C) five times the economic damages. D) three times the economic damages.

d

In order to prove allegations of statutory real estate fraud in a court of law, prosecutors must demonstrate all of the following EXCEPT A) intentional false representation of material facts. B) damage as a result of false representation. C) reliance on false representation. D) economic gain by the accused.

d

The DTPA provides that a consumer can sue if the consumer has suffered economic damages produced by unconscionable action by another. "Unconscionable" means A) that the consumer is not aware of being taken advantage of by another person. B) that the consumer has lost the ability to distinguish between right and wrong. C) that a person has lied to the consumer. D) that a person has taken advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.

d

To make a misrepresentation claim against a broker, the buyer must have A) physical proof of the misrepresentation. B) corroboration from the seller. C) witnesses to the misrepresentation. D) suffered damages.

d

What was the intent for the change to the DTPA in 2011 to exempt brokers and sales agents acting in a real estate brokerage capacity? A) To clarify that brokers and sales agents should not be held liable under the DTPA for fraud B) To clarify that brokers and sales agents should not be held liable under the DTPA for failing to disclose factual information known to the agent C) To clarify that brokers and sales agents should not be held liable under the DTPA for any reason D) To clarify that brokers and sales agents should not be held liable under the DTPA for giving bad advice related to a real estate transaction

d

Which of the following actions must a consumer take before filing a lawsuit under DPTA? A) Specify the terms under which a settlement would be accepted. B) Disclose previous DPTA-related lawsuits under which he was a party. C) Provide the would-be defendant legal representation. D) Give the would-be defendant a 60-day notice.

d

Which of the following acts by a broker would fall under the list of deceptive practices as defined by the Deceptive Trade Practices Consumer Protection Act? A) Telling a buyer that a home will be great for young children, when the last owners had no children B) Telling a buyer that the local school is very good C) Telling a buyer the community is quiet, when it is known for its large holiday celebrations D) Telling the buyer that the tiles in the foyer were American made, when they were imports

d

Which of the following is a reasonable defense brokers may use against DTPA lawsuits? A) A broker may claim that he didn't know the information he provided was false. B) A broker may claim that he received no financial advantage through accidental misrepresentation. C) All of these are good defenses against a DTPA lawsuit. D) A broker supplied a timely written notice that he is relying on written information supplied by someone else.

d