Module 5 Topic Mastery 30 question Practice Test

Which of the following is true of a contract under novation? Select one: a. A new contract replaces the old one b. The old contract is void c. A new party is assigned the rights and obligations of an old party d. Both A and B

A new contract replaces the old one

Under which circumstances could a lessee (renter) move out prior to the end of their lease date and NOT be held liable for the remaining lease/rent? Select one: a. Condemnation b. Constructive eviction c. Mutual agreement d. All of the above

All of the above

Which of the following contracts would be invalid if it did NOT contain a description of the property? Select one: a. A listing agreement b. A contract for the sale of real property c. A real estate option agreement d. All of the above

All of the above

Which of the following is considered termination of an offer? Select one: a. Counteroffer b. Expiration c. Withdrawal d. All of the above

All of the above

Which of the following BEST defines a valid contract? Select one: A. An offer and acceptance, between competent parties to do a specific legal act B. A written agreement between competent parties to abstain from doing a specific act C. An offer and acceptance, between competent parties who, for consideration, agree to do or not to do, a specific legal act D. A mutual agreement between two or more parties

An offer and acceptance, between competent parties who, for consideration, agree to do or not to do, a specific legal act

ernon presents an offer to a seller, with the provision that it must be accepted within 72 hours. Under which of the following circumstances would the offer terminate? Select one: a. Vernon dies before the seller accepts the offer b. The seller re-submits the offer with a minor change to the settlement date c. The seller proposes to wait a week before acceptance d. Any of the above would terminate the offer

Any of the above would terminate the offer

Which of the following circumstances would NOT terminate an offer to sell real property? Select one: a. Lapse of reasonable time b. Rejection of the offer by the offeree c. Death of the salesperson d. Revocation of the offer

Death of the salesperson

Which buyer-broker agreement is the counterpart of the exclusive agency listing agreement? Select one: a. Exclusive Agency Buyer Agency Agreement b. Exclusive Buyer Agency Agreement c. Open Buyer Agreement d. None of the above

Exclusive Agency Buyer Agency Agreement

Jeff's sports gambling addiction has resulted in deep debt. Jeff knows he cant afford his house any longer and decides to sell. He signs an exclusive right to sell listing agreement with Broker Sara. Sara finds a ready, willing and able buyer who makes an offer on Jeff's house but prior to accepting the offer Jeff files bankruptcy. Can the sale still go through? Will Sara earn her commission? Select one: a. Jeff can accept the offer and Broker Sara will have earned her commission b. Jeff can accept the offer but due to the bankruptcy Broker Sara will not earn a commission c. Jeff cannot accept the offer, the listing terminates but he still owes Broker Sara a commission d. Jeff cannot accept the offer, the listing terminates and the agency agreement terminates with no commission

Jeff cannot accept the offer, the listing terminates and the agency agreement terminates with no commission

Which of the following listing agreements is LEAST likely to specify a commission rate? Select one: a. Open listing b. Net listing c. Exclusive agency d. Exclusive right-to-sell

Net listing

Seller Pruitt signed an exclusive right-to-sell listing with Broker Cook. The listing includes a 7% commission and a clause which states that this agreement is in effect until the house is sold. Is this legal? Select one: a. No, because the commission was over 6% b. No, because the term is potentially indefinite c. Yes, if it is a multiple listing d. Yes, assuming all other elements are satisfied

No, because the term is potentially indefinite

Tom makes a full price offer to purchase property from Jerry, while Jerry considers the offer it is revealed that Tom was deemed legally insane last year. What are Jerry's options, can he accept the offer? Select one: a. Yes, Jerry can still accept the offer and then Tom will have to follow through with the purchase b. No, insanity terminates all unaccepted offers c. Yes, Jerry can accept as long as there is a meeting of the minds d. Yes, Jerry has a right to accept any offers that are presented

No, insanity terminates all unaccepted offers

Jennifer signed a 12 month lease agreement in September to rent an apartment near her college. She had only been living there for 4 months when she had to reported a heat problem to her landlord, her apartment was always cold. Two weeks later, right in the middle of winter, she still did not have heat so she moved out. Will Jennifer still be liable for the remaining 8 months of her lease? Select one: a. Yes, when she moved out she breached her contract b. Yes, leases cannot be broken because of a maintenance issue c. No, she cant be held liable because the apartment was uninhabitable d. No, she cant be held liable because the landlord doesn't have her forwarding address

No, she cant be held liable because the apartment was uninhabitable

Denise has been renting out her second home to her nephew Sam for almost 20 years when she decides to gift the property to Sam and an agreement is signed. However, Just prior to closing on deal, Denise decides her financial situation won't allow her to gift the property to Sam, and she tells him he can buy the property instead. Can Denise be made to honor her original offer to gift the property to Sam? Select one: a. Yes, a promise was made and an agreement was signed which Denise will have to honor b. Yes, courts will enforce any written contract between two people c. No, there is no legal detriment in a gift promise and they are unenforceable d. No, this was a family agreement made without using a real estate agent and is unenforceable

No, there is no legal detriment in a gift promise and they are unenforceable

What is NOT required for a valid real estate sales contract? Select one: a. Performance b. Offer and acceptance c. Consideration d. Be in writing

Performance

Which of the following items would cancel a contract without breaching it? Select one: a. Option clause b. Right of first refusal c. Subordination clause d. Rescission agreement

Rescission agreement

Ryanne buys a property from Andy and they close the deal on Friday, August 8th. The same day the new deed for the property is recorded at the county records office. Two weeks later Ryanne calls her agent to say she never received notice of the property being in her name. What should the agent tell her? Select one: a. Since the deed was properly recorded that serves as inquiry notice b. Since the deed was properly recorded that serves as constructive notice c. Since the deed was properly recorded that serves as actual notice d. None of the above, Ryanne was not properly notified

Since the deed was properly recorded that serves as constructive notice

A court order requiring parties to perform as agreed is known as a suit for: Select one: a. Specific performance b. Quiet title c. Quiet enjoyment d. Punitive damages

Specific performance

Phil is a salesperson working for Broker Joan. Phil takes a listing on January 3rd. The listing is a 60-day exclusive right-to-sell agreement. On February 1st, Phil was killed in an automobile accident. What is the status of the listing? Select one: a. The listing becomes an open listing b. The listing terminates by operation of law c. The listing remains valid d. The seller may now list the property with another salesman working for Broker Joan

The listing remains valid

Marshall enters into a contract to sell his home to Vicki, who puts down a $3,000 earnest money deposit. At the last minute, Vicki backs out of the deal without cause. Marshall keeps the earnest money deposit. This is an example of: Select one: a. The non-breaching party accepting liquidated damages b. The non-breaching party accepting partial performance c. The breaching party accepting liquidated damages d. The breaching party accepting partial performance

The non-breaching party accepting liquidated damages

Fred and Wilma have a signed real estate contract. Fred the seller backs out and Wilma the buyer sues for specific performance. What does Wilma hope to gain from the lawsuit? Select one: a. Liquidated damages b. A new sales contract c. Money d. The property

The property

A buyer and a seller entered into a valid sales contract. Which of the following circumstances is least likely to jeopardize the sale? Select one: a. Interest rates increase substantially after contract ratification b. The seller dies prior to closing c. The state condemns the property for environmental reasons d. The lender holding the current mortgage forecloses

The seller dies prior to closing

What is the primary difference between an installment sales contract and a sales contract? Select one: a. There is no practical difference b. The seller faces greater risk under an installment sale c. Title does not pass under an installment sale d. The buyer faces greater risk under a sales contract

Title does not pass under an installment sale

A landlord is obligated to provide all of the following EXCEPT: Select one: a. Quiet enjoyment b. Safe and habitable premises c. Use as the tenant and landlord negotiate d. Possession by the tenant

Use as the tenant and landlord negotiate

A contract of sale cannot exist without an offer and: Select one: a. assignment b. mortgage c. assessment d. acceptance

acceptance

After the death of his wife, a property owner lists his property with a broker. Two days later, the owner sells the property himself, but is NOT obligated to pay a commission to the broker. What type of listing agreement did he most likely sign? Select one: a. Exclusive Agency b. General (open) c. Exclusive right-to-sell d. Both A and B

Both A and B

Regarding contracts, what is a "defense"? Select one: a.Material defect making the contract void b. Material defect making the contract unenforceable c. Legal terminology within a contract detailing cancellation options d. Both A and B

Both A and B

Betty and Billy had a contract for sale, but it discharged. Which of the following statements must be true about Betty and Billy's conduct? Select one: a. Both Betty and Billy fully performed b. Either Betty or Billy is in breach c. Both parties may seek damages d. Both B and C

Both Betty and Billy fully performed

An offer is made to a seller, and the seller makes a counteroffer. Prior to receiving an acceptance, the seller receives a new and better offer from another prospective buyer. Under the circumstances, the seller: Select one: a. should withdraw the counteroffer b. must wait to see if the counteroffer is accepted c. is best served by accepting the second offer d. is bound by the terms of the counteroffer

should withdraw the counteroffer

Which of the following is required for a contract to be valid? Select one: a. Must be written b. Property description c. Consideration d. All of the above

Consideration