Chapter 11- REAL ESTATE CONTRACTS

If an owner revokes an exclusive right of sale listing and sells the property during the remaining time the listing would have been in effect, what is the broker entitled to? (a) A full commission (b) Bring a suit for damages (c) Write off the loss on their income taxes (d) Revoke the listing contract

(a) A full commission

What is the term used to describe the consideration given by a buyer to indicate serious intent to buy a property? (a) An earnest money deposit (b) A check deposit (c) Legal tender (d) A boot deposit

(a) An earnest money deposit

Which term refers to a type of contract where all terms and conditions are NOT fully expressed? (a) Implied (b) Bilateral (c) Parol (d) Executory

(a) Implied

To which of the following does the phrase "meeting of the minds" refer? (a) Offer and acceptance (b) Consideration (c) Lawful subject (d) Two or more parties

(a) Offer and acceptance

What is the term used to describe the party who receives an offer? (a) Offeree (b) Offeror (c) Optionor (d) Optionee

(a) Offeree

Which of the following would be a valid remedy for breach of a purchase and sale contract? (a) Sue for damages (b) File an Escrow Disbursement Order (c) Make a claim on the Recovery Fund (d) File a complaint with FREC against the licensee

(a) Sue for damages

What is the legal term that is used to designate the transfer of rights in a contract from one party to another? (a) Revocation (b) Assignment (c) Renunciation (d) Subordination

(b) Assignment

Which of the following list of actions contain valid ways that a contract could be terminated? (a) Performance, Rejection of the offer, or Renunciation (b) Breach, Performance, or Lapse of time (c) Assignment, Abandonment, or Breach (d) Consideration, Performance, or Revocation

(b) Breach, Performance, or Lapse of time

Which of the following statements is correct regarding the Statute of Frauds? (a) It requires all licensees to receive training in anti-fraud measures. (b) It requires certain contracts to be in written form to be enforceable in court. (c) It describes the time limit for the enforceability of written and oral contracts. (d) It is enforced by the Florida Real Estate Commission and the Department of Business and Professional Regulation.

(b) It requires certain contracts to be in written form to be enforceable in court.

Which of the following best describes a contract? (a) A written instrument (b) Legally binding (c) Void unless accompanied by earnest money (d) Always bilateral

(b) Legally binding

Which of the following is an essential element of a valid and enforceable real estate sales contract? (a) At least one party must sign the agreement. (b) Offer and acceptance must be communicated by each party to the other. (c) The document must be prepared by an attorney. (d) The document must be under seal.

(b) Offer and acceptance must be communicated by each party to the other

Which of the following establishes the time period for enforcement of a contract? (a) Statute of Frauds (b) Statute of Limitations (c) Real estate license law (d) State courts

(b) Statute of Limitations

Which of the following is correct regarding the "as is" provision in a sales contract? (a) Since the buyer has agreed to the "as is" provision, it is "buyer beware" because the seller does not have to disclose any defects. (b) The seller is still required to disclose all known defects that may materially affect the value of the property. (c) The "as is" provision helps to protect the broker from liability. (d) The buyer is required to have the property inspected, to ensure that there are no defects.

(b) The seller is still required to disclose all known defects that may materially affect the value of the property.

What are the required elements of all valid contracts? (a) Lawful subject, competent parties, legal age, and offer (b) Offer, acceptance, legal age, and lawful subject (c) Lawful subject, agreement, consideration, and two or more competent parties (d) Meeting of the minds, legal age, offer, and competent parties

(c) Lawful subject, agreement, consideration, and two or more competent parties

A real estate licensee is legally allowed to prepare all of the following types of documents, EXCEPT: (a) Purchase and sale contracts (b) Listings (c) Leases (d) Option contracts

(c) Leases

A buyer and seller entered into a Purchase and Sale Agreement. The buyer chose not to close and defaulted on the agreement. The seller claimed the escrow deposit. What type of damages can be sought? (a) Liquidated damages to the buyer (b) Unliquidated damages to the buyer (c) Liquidated damages to the seller (d) Unliquidated damages to the seller

(c) Liquidated damages to the seller

Which of the following is an example of a unilateral contract? (a) Purchase and sale contract (b) Contract for deed (c) Open listing contract (d) Oral contract

(c) Open listing contract

An option contract is a unilateral contract that is binding upon which party? (a) Buyer (b) Grantee (c) Optionor (d) Optionee

(c) Optionor

A seller wishes to net $140,000 from the sale of a property. Closing costs are estimated to be $3,600, and the broker will receive a 7% commission. What sales price will pay the expenses and meet the seller's net requirement? (a) $150,538 (b) $153,400 (c) $154,138 (d) $154,409

(d) $154,409

All of the following may terminate an offer, EXCEPT: (a) Expiration of a reasonable or specified time period (b) The death of the offeror (c) A counteroffer (d) A failure to obtain a binder deposit

(d) A failure to obtain a binder deposit

A buyer who negotiates a contract to purchase property, takes possession and pays the property purchase price in installments, but does not receive the legal title until the full purchase price has been paid. What is this agreement called? (a) An obvious attempt to defraud the buyer (b) A lease-option (c) A violation of the Statute of Frauds (d) An installment contract, contract for deed, or land contract

(d) An installment contract, contract for deed, or land contract

Offers may be terminated by all of the following, EXCEPT: (a) Acceptance (b) Rejection (c) Withdrawal (d) Breach

(d) Breach

Which of the following terms best describes a contract in which all of the terms and conditions have been fully performed? (a) Executory (b) Bilateral (c) Unilateral (d) Executed

(d) Executed

What type of contract exists when the court determines that a contract existed due to the actions of the parties? (a) Formal contract (b) Oral contract (c) Parol contract (d) Implied contract

(d) Implied contract

Which of the following statements is correct regarding an option contract? (a) It requires the buyer to buy at a specific price for a specific time. (b) It is binding upon the buyer. (c) It is a bilateral contract. (d) It gives a buyer the right to purchase for a specified time at a specified price.

(d) It gives a buyer the right to purchase for a specified time at a specified price.

Which statute requires a purchase and sale contract to be in writing to be enforceable? (a) F.S. 475 (b) F.S. 120 (c) Statute of Limitations (d) Statute of Frauds

(d) Statute of Frauds

In which circumstance is a broker's commission subject to forfeiture? (a) The broker has an oral listing contract. (b) The broker fails to obtain witnesses to a real estate sales contract. (c) The broker performs according to the employment contract. (d) The broker violates a fiduciary duty.

(d) The broker violates a fiduciary duty.