Contract Performance

Crossing out part of the printed matter in a contract is: A. illegal. B. unauthorized practice of law. C. allowed but should allow a reader to see what was crossed out. D. a violation of Commission Rules.

allowed but should allow a reader to see what was crossed out. When a printed item does not express the wishes of a party, it maybe be crossed out. However, the crossed out items should still be legible.

A contract could be rescinded due to: A. mistake. B. fraud. C. misrepresentation. D. any of these.

any of these

When more than one offer is received, the seller may accept or make a counteroffer on: A. the first offer only. B. the highest offer only. C. all offers simultaneously. D. any offer received.

any offer received

When one party fails to live up to her contractual obligations, it is know as: A. termination. B. novation. C. assignment. D. breach.

breach

If the current or previous owner of a property was infected with AIDS, when should the owner or real estate professional disclose this information to a potential buyer? A. Never b. Only if asked by the buyer C. Always D. Only if directed by his/her broker

never it is protected under the Federal Fair Housing Act

A seller sold his farm under a written contract of sale that made no statements about assignment. The buyer assigned the contract of sale to a new buyer. Until the sale is settled, the equitable title is held by the: A. seller. B. first buyer. C. first buyer and new buyer. D. new buyer.

new buyer. All contracts are assignable unless there are terms specifying that they cannot be assigned. Obligations move to the person whom the contract is assigned to--in this case, the new buyer.

If a seller accepts and signs an offer made by a purchaser, the next thing the listing agent should do is: A. notify her broker immediately. B. sign the contract for her broker. C. notify the buyer's agent immediately. D. notify the buyer.

notify the buyer's agent immediately

"Time is of the essence" is a concept of real estate law concerning: A. conditions of record. B. delivery of title. C. leases. D. performance.

performance. "Time is of the essence" means that both parties agree to perform by any dates specified in the contract. If one party is ready to perform by a specified date and the other is not, the party ready to perform can declare a default of the contract. It does not require either party to perform before the specified date. This clause is found in the earnest money (purchase and sale) contract.

A legal procedure or action brought by either the buyer or seller to enforce the terms of the contract is known as: A. an option. B. specific performance. C. contract. D. legality of object.

specific performance.

A remedy in court compelling the seller to sell the property is known as: A. execution. B. foreclosure. C. specific performance. D. equity of redemption.

specific performance. "Specific performance" is an action brought in court to compel a party to carry out the terms of a contract. A seller could sue a buyer, requiring him to buy the property, and a buyer could sue a seller, requiring him to sell the property, if either party defaults.

If a seller has already accepted one offer and another offer comes in, the listing agent should: A. submit the new offer. B. hold the new offer. C. submit the new offer if better than the current contract. D. reject the new offer.

submit the new offer

Real estate values are inflating rapidly. Despite having already signed a written contract of sale, the seller refuses to complete the sale. The remedy the buyer may choose is: A. action to quiet title. B. rescission. C. liquidated damages. D. suit for specific performance.

suit for specific performance.

When a new contract is introduced through novation, the old contract: A. is amended. B. remains in effect. C. terminates. D. must be rescinded by the parties.

terminates.

If a party to a valid real estate contract dies while the contract is executory, the contract: A. terminates. B. is enforceable on the deceased party's estate. C. must be renegotiated with the estate of the deceased party. D. is voidable.

is enforceable on the deceased party's estate

When presenting an offer to a seller and the seller has legal questions about the contract, the real estate professional should: A. answer the questions to the best of his or her knowledge. B. answer only the questions the professional is sure about. C. advise the seller to consult the broker. D. advise the seller to consult a lawyer.

Advise the seller to consult a lawyer

When a signed sales contract is assigned, the disbursal of earnest money is determined by: A. an agreement between the parties. B. the listing broker. C. the seller and listing broker. D. the Law of Agency.

An agreement between the parties. The assignment contract sets the terms for how items within the contract being assigned will be handled.

A contract may be canceled: A. under no circumstances. B. with 30 days' notice by either party. C. by an attorney for either party. D. by mutual agreement between the parties.

By mutual agreement between the parties. Mutual agreement or mutual rescission may be used to terminate a contract.

Unless the sales contract stipulates to the contrary, the risk of loss or damage to property before legal title or possession is transferred to the buyer falls on the: A. seller's insurance company. B. buyer's title insurance. C. seller. D. buyer.

Seller.

If a party to a valid real estate contract becomes bankrupt while the contract is executory, the contract: A. terminates. B. is still enforceable. C. must be renegotiated. D. is voidable.

Terminates.

The phrase in a contract indicating that a party is in breach of the contract if he or she fails to perform by the specified deadline is referred to as: A. time is guaranteed. B. timeliness is crucial. C. time is of the essence. D. timeliness is of the utmost importance.

Time is of the essence. Time is of the essence states that each party will perform all terms by the date listed in the contract.

An executed sales contract may be assigned under what conditions? A. Under no conditions B. Only if the contract provides for it C. Only with the seller's permission D. Unless the contract prohibits it

Under no conditions. Executed contracts are closed and cannot be assigned. Only executory contracts may be assigned.

A month-to-month tenancy must include which of the following to be valid? A. Oral or written contract B. Consideration C. Offer and acceptance D. All of these

all of these. Since a lease is a contract, it must have consideration, offer and acceptance, legal object, and competent parties. If it's for less than one year, it can be oral.

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

the contract must not be for an illegal purpose or against public policy. To have a valid contract, four elements are needed. These are: (1) competent parties; (2) mutual consent (the offer and acceptance of the offer); (3) legal consideration (promises, something of value, an act, giving up the right to act, etc.); (4) legal object (the parties are agreeing to do something that is legal and not against public policy) so that the contract is legally enforceable in a court of law.

An executory contract may be assigned: A. if provided for in the contract. B. under no circumstances. C. under any circumstances. D. unless prohibited in the contract.

unless prohibited in the contract. All contracts are assignable unless prohibited within the terms of the contract.