Quiz #3

The current award for liquidated damages on a purchase agreement form is a maximum of: a. 3% of the home purchase price. b. 13% of the home purchase price. c. 33% of the home purchase price. d. 133% of the home purchase price.

a. 3% of the home purchase price.

An agreement that is made either verbally or in writing is known as a(n): a. express contract. b. mutual consent. c. implied contract. d. all of the above.

a. Express contract.

Which of the following is FALSE concerning options? a. they can be revoked at any time by the optioner (seller), without penalty. b. they have specific terms. c. they have specific time periods. d. they are granted in exchange for money.

a. They can be revoked at any time by the optioner (seller), without penalty.

If a contract is said to be "executory," it: a. is court ordered. b. has not yet been performed. c. has been discharged or performed. d. has not yet been signed.

b. Has not yet been performed.

Any contract that can't be performed within one year from the date of signing: a. is illegal. b. must be in writing. c. is a failure to perform. d. is an example of duress.

b. Must be in writing.

Which of the following is NOT considered a basic element of any contract? a. enforcement b. mutual consent c. capacity d. consideration

a. enforcement

If one of the parties doesn't go through with a contract (nonperformance), it is called a(n): a. assignment. b. breach. c. consideration. d. operation of law.

b. Breach.

A provision in a contract stating the purchase depends on the buyer qualifying for a loan is called a: a. loan back-out clause. b. covenant. c. "subject to" provision or contingency clause. d. all of the above.

c. "Subject to" provision or contingency clause.

Consideration can best be described as: a. money paid in a contract. b. good will. c. anything of value. d. not necessary in a valid contract.

c. Anything of value.

Which of the following is used to change the original terms of the purchase agreement? a. covenant form b. contingency form c. counter offer form d. substitution form

c. Counter offer form

A written contract between two parties is: a. express and unilateral. b. implied and bilateral. c. express and bilateral. d. implied and unilateral.

c. Express and bilateral.

What is always true about a counter offer? a. it is made by the buyer. b. it is made by the seller. c. it terminates the previous offer. d. the previous offer is still valid.

c. It terminates the previous offer.

When an existing contract is replaced with an entirely new contract, it is called: a. rescission. b. assignment. c. novation. d. subordination.

c. Novation.

Of the following, which most nearly means the same thing as "rescind?" a. Arrest b. Reword c. Terminate d. Fulfill

c. Terminate

A remedy for breach can be: a. a unilateral rescission. b. an action for damages. c. an acceptance of breach. d. all of the above.

d. All of the above.

Which of the following is a classification of a contract? a. valid b. unenforceable c. voidable d. all of the above

d. All of the above

Which of the following is FALSE concerning purchase agreement contracts? a. they must be accompanied by a deposit of money or other items of value. b. when acceptance is communicated to the buyer, it becomes a binding contract. c. an agent must give a copy to both buyer and seller. d. promissory notes and post-dated checks are never acceptable as consideration.

d. Promissory notes and post-dated checks are never acceptable as consideration.

Which of the following is NOT a remedy for breach of contract? a. unilateral rescission b. specific performance c. action for dollar damages d. substitute performance

d. Substitute performance

A signed written contract takes precedence over oral agreements or prior written agreements based on: a. the performance rule. b. English common law. c. the statute of frauds. d. the parol evidence rule.

d. The parol evidence rule.

An assignment: a. is only for personal service. b. transfers only liability. c. is a new contract. d. transfers a person's right in a contract.

d. Transfers a person's right in a contract.