Module 2: Contract Law

Which of the following statutes or act creates the need for a contract to lease for a year or more to be in writing? The Statute of Limitations The Recording Act The Statute of Frauds The Statute of Descent

The Statute of Frauds

A contract created by actions rather than oral or written words is called an expressed contract. an actionable contract. an implied contract. a determinable contract.

an implied contract.

The Oregon Statute of Frauds requires that all legally enforceable I) property management agreements be in writing. II) leases for a year or more be in writing. II only I only Both I and II Neither I nor II

Both I and II

To create a valid contract, a property management agreement must be I) in writing. II) have a definite expiration date II only Both I and II I only Neither I nor II

Both I and II

With respect to the material facts concerning a property, a licensee in a real estate transaction may be guilty of misrepresentation by I) commission. II) omission. Both I and II I only II only Neither I nor II

Both I and II

A contract can be voided if it was signed under duress. undue influence. a threat of force. Any of the above

Any of the above

Which of the following is the best description of a contract? An agreement whereby all parties to the agreement have contractual ability. An agreement between competent parties, giving each the right to cancel the contract provided legal notice is given. An agreement between competent parties and based upon legal consideration that creates legally enforceable duties and obligations. An executed document in which all essential elements have been fulfilled.

An agreement between competent parties and based upon legal consideration that creates legally enforceable duties and obligations.

A person must have the legal capacity to enter into a contract. Which of the following statements concerning legal capacity is true? I) A minor's contract is valid unless he disaffirms the contract. II) An illiterate person can be bound by a written contract. II only Both I and II I only Neither I nor II

Both I and II

A real estate property manager can be guilty of misrepresentation by I) direct acts or statements. II) acts of omission, such as failure to disclose vital information. II only I only Both I and II Neither I nor II

Both I and II

A contract that has no force or effect in law is I) void. II) voidable. III) unenforceable. I and III only I and II only III only II and III only

I and III only

In Oregon, which of the following must be in writing to be enforceable? I) A property management agreement II) A lease for less than a year II only Both I and II I only Neither I nor II

I only

To comply with the Statute of Frauds, all real estate contracts must be I) written. II) acknowledged. III) recorded. I only I and II only I, II and III I and III only

I only

Which of the following are necessary to prove that a misrepresentation constituted a fraud? I) That the person making the misrepresentation knew that the statement was false and made the statement with the intent to deceive the other party. II) That the statement was regarding a material fact. III) That the party to whom the misrepresentation was made acted upon it to his/her detriment. IV) That the statement was in writing. I, II, IV only I, III, IV only II, III, IV only I, II, III only

I, II, III only

Essential elements of a contract include I) consideration in the form of money. II) competent parties. III) mutual agreement. I and III only II and III only I and II only I, II and III

II and III only

Which of the following is necessary to establish misrepresentation? I) The assertion was in writing. II) The assertion was material to the formation of the contract. III) The assertion was false. II and III only III only I, II and III I and II only

II and III only

A 'voidable' contract is I) unenforceable. II) valid until action is taken to make it void. I only II only Both I and II Neither I nor II

II only

A contract is generally void if I) it was entered into with a minor. II) it requires an illegal act for performance. I only II only Both I and II Neither I nor II

II only

A lease made with a lessor who is under legal age of majority, (who is a minor) is I) voidable by lessee. II) voidable by lessor. Both I and II II only I only Neither I nor II

II only

The term 'consideration' as applied to contracts means I) careful thought has been given to the agreement. II) something which is given in exchange for something from the other party. I only Both I and II II only Neither I nor II

II only

Which one of the following statements concerning the assignment of contracts is correct? I) Property management agreements are assignable without the client's consent. II) Unless prohibited in the contract, a lease may be assigned by the lessee. Both I and II II only I only Neither I nor II

II only

Which of the following is not essential to a valid contract? Monetary consideration Competent parties A lawful object Offer and acceptance

Monetary consideration

A voidable contract is a contract which is I) legally insufficient and not recognized by law. II) not binding on either party. II only I only Both I and II Neither I nor II

Neither I nor II

In Oregon, a married girl under age 18 I) is considered to be a minor, and any contract she enters into is voidable. II) can disaffirm any contract entered into, until a reasonable time after reaching the age of majority. I only Both I and II II only Neither I nor II

Neither I nor II

A voluntary agreement between legally competent parties to do or refrain from doing some legal act is called a lis pendens. waiver. attachment. None of the above

None of the above

A contract must have certain specific elements in order for it to be valid. Which of the following is not a necessary component to form a valid contract? Notarization Consideration Offer Acceptance

Notarization

Which of the following is not a necessary element in the formation of a contract? Acceptance Consideration Offer Performance

Performance

An oral lease for two years is not enforceable due to the Statute of Frauds. Uniform Commercial Code. Statute of Limitations. Usury Laws.

Statute of Frauds.

It is said that a valid contract must have legality of object. Which of the following best describes 'legality of object'? The contract must not be for an illegal purpose or against public policy. All parties are of legal age and agree upon the legal consideration to be paid. An agreement between competent parties that is legally enforceable. Either party has the legal right to cancel the contract, provided legal notice is given.

The contract must not be for an illegal purpose or against public policy.

Every valid contract must meet all of the following requirements EXCEPT a legitimate purpose. legally competent parties to the agreement. an offer and acceptance mutually agreed upon. a consideration clause expressed in monetary terms.

a consideration clause expressed in monetary terms.

A contract could be rescinded due to mistake. misrepresentation. fraud. any of the above reasons.

any of the above reasons.

To have a valid contract, a series of elements are needed. They are: parties promising to do or not to do certain things for legal consideration, provided the agreement is with a lawful object in mind. competent parties promising to do or not to do certain things for legal consideration, provided the agreement is with a lawful object in mind. an agreement to do or not to do a certain thing between parties having a legal purpose in mind for adequate consideration. mutual promises between two or more persons agreeing to do a lawful object for adequate consideration.

competent parties promising to do or not to do certain things for legal consideration, provided the agreement is with a lawful object in mind.

An executory contract is always a contract with an executor of an estate. contract that has been fully performed. contract that is to be performed. written contract that cannot be altered by an oral agreement.

contract that is to be performed.

An agreement between competent parties upon legal consideration creating legally enforceable duties and obligations' is a definition of legality of object. specific performance. offer. contract.

contract.

Using threats to force a person to enter into a contract involuntarily is known as duress. fraud. negligence. risk.

duress.

A voidable contract is invalid and the contract cannot be enforced by either party. void because one party to the contract has an unfair advantage over the other party. enforceable, but is subject to rescission by one of the parties to the contract. illegal because all of the elements to create the contract are not present.

enforceable, but is subject to rescission by one of the parties to the contract.

When the parties to a contract have fully performed the terms, the contract may properly be described as acknowledged. expressed. executed. secured.

executed.

A contract that results from neither a written nor oral agreement, but from the actions of the parties involved is referred to as an implied contract. executed contract. expressed contract. None of the above

implied contract.

A principal broker obtained a signed offer and an earnest money check from a qualified prospect and his spouse. Before the principal broker could present the offer to the seller, the buyer called to say he was being transferred out of town and wanted to withdraw his offer. In this case, the buyer could be successfully sued for specific performance. must forfeit a portion of his earnest money deposit. is within his rights to withdraw his offer. must forfeit his entire earnest money deposit.

is within his rights to withdraw his offer.

The requirement that a contract must not be for an illegal purpose or against public policy is referred to as: the common law. legality of object. meeting of the minds. specific performance.

legality of object.

Consideration in a contract is more than ten percent of the purchase price. may be an exchange of promises. is not essential. all of the above.

may be an exchange of promises.

All of the following are essential elements to a lawfully enforceable contract, EXCEPT recordation. mutual assent. legality of object. consideration and competency.

recordation.

The term 'waiver' as used in a legal contract is best defined as to voluntarily give up or surrender a right. the mutual exchange of privileges. estoppel. detrimental justification.

to voluntarily give up or surrender a right.

A contract created to pursue an illegal objective is valid. breached. voidable. void.

void.

Two parties signed a contract which both knew was for an illegal purpose. Under these circumstances the contract would be voidable. valid as long as both parties agreed not to divulge the purpose of the contract to anyone. valid. void.

void.

Coercion and duress were applied upon Albert in a contract with Roger. The contract is voidable at the option of Albert. voidable at the option of either Albert or Roger invalid. voidable at the option of Roger

voidable at the option of Albert.