RE chapter 7

Once the seller accepts an offer, if the buyer fails to complete the purchase, the seller may keep the buyer's deposit as ______________________________.

liquidated damages

A contract that results when a promise is exchanged for a promise is called a. bilateral contract. b. unilateral contract. c. express contract. d. implied contract.

A

A meeting of the minds creating enforceable rights is called a. a contract. b. an estoppel. c. a lien. d. a deed.

A

An offeree who wishes to bind the offeror to the contract may do which of the following with an offer? a. Accept it b. Modify it slightly before acceptance c. Withdraw it prior to acceptance d. Accept and counter with conditions

A

Assuming that no fraud is intended, what is the status of a contract signed by an illiterate person? a. Valid b. Void c. Voidable d. Unenforceable

A

If a contract is breached and the damaged party wants the contract carried out, he would sue for a. specific performance. b. money damages. c. novation. d. unilateral rescission.

A

In the absence of a special provision for such an event, an offer to purchase will probably be voided a. by the death of either buyer or seller before acceptance. b. if the seller changes his mind after accepting the offer. c. if not accepted within 24 hours. d. if the seller should receive a higher offer from another buyer.

A

The broker has the power to sign documents for the principal. This is probably because she holds a. a power of attorney. b. an agency relationship. c. special agent status. d. an attorney-at-law.

A

The buyer agreed to buy the property at the seller's asking price. They shook hands on the deal. Later, the seller refused to sell. If the buyer still wants to buy, he can a. hire an attorney and sue for non-performance. b. go to a small claims court and sue for damages. c. consult a real estate broker and ask her to explain that the seller must honor the agreement. d. do nothing.

A

Which of the following are considered to be legally competent? a. Corporations b. Persons of unsound mind c. Minors d. A 15 year old woman

A

A contract created under duress is a. invalid. b. voidable. c. unenforceable. d. void.

B

A contract entered into by a minor is a. illegal. b. voidable. c. valid. d. unenforceable.

B

An executory contract is a a. contract which has been completely executed. b. contract in which certain things are still to be done. c. will in probate for which an executor has been named. d. contract which has not been signed.

B

John and Jay are brothers who received title to a property from their father. When they decided to sell the property, Jay was out of town. In order to properly transfer title, the deed could be signed by a. John alone, since they are brothers. b. John, with a properly recorded power of attorney from Jay. c. John and the father, since the father was the original owner. d. no one, since both must be present.

B

The agency relationship of a real estate broker with his client is most often established by a. an implied contract. b. express contract. c. an endorsement. d. a ratification.

B

The sum of money agreed upon in advance to be the damages in the event certain problems occur later is best described as a. judgement damages. b. liquidated damages. c. default damages. d. punitive damages.

B

To be legally competent, a person must reach the age of a. minority. b. majority. c. reasonable competence. d. 17 years.

B

Two persons make an oral agreement. A day later they put it in writing with several small changes. What is true about the agreement in a court of law? a. The oral one would prevail b. The written one would prevail c. A new agreement must be made d. The agreement must be notarized to be legal

B

When the prospective tenant signed the lease, he indicated that he would be using the building to sell appliances. Later, the landlord discovered that illegal bingo games were being played there. What can the landlord do? a. He can do nothing as long as the tenant is current with the rent. b. He can declare the lease void and start eviction proceedings. c. He must have a conversation with the tenant to try to persuade him to stop the illegal activity. d. He can organize a boycott.

B

Which of the following is an essential element of a contract? a. A counter offer b. Acceptance c. Performance d. A fair price

B

A real estate broker could most likely be held liable to a buyer if the broker a. makes a misrepresentation to the buyer based on false information given to him by the seller. b. signs an agreement with the buyer on behalf of the seller under the power of attorney granted by the seller. c. acts in excess of the authority given to him by the seller under a listing agreement. d. retains the buyer's check at the seller's request after an offer has been accepted by the seller and acceptance has been communicated to the buyer.

C

All of the following are essential elements of a contract EXCEPT a. competent parties. b. lawful objective. c. monetary consideration. d. meeting of the minds.

C

All of the following are real estate contracts EXCEPT a. an exclusive right to sell listing. b. a sales agreement. c. a closing statement. d. a lease.

C

The party making an offer is called the a. offeree. b. grantee. c. offeror. d. agent.

C

The requirement that transfers of real property be in writing is known as a. contract law. b. the bill of rights. c. the statute of frauds. d. due process.

C

When one party to a contract makes a promise without first receiving any promise of performance from the other, it is called a. a bilateral contract. b. an implied contract. c. a unilateral contract. d. an executory contract.

C

A lease is an example of a a. non-contractual agreement. b. declaration of intent. c. unilateral contract. d. bilateral contract.

D

A man put up $10,000 as earnest money on a property for sale. The next day, he needed the money back and attempted to cancel his offer. Which of the following is true? a. He can get out of the offer because he has a three day right of rescission. b. The decision would be entirely up to the broker. c. He can get out of the offer because of the six-day right of rescission. d. He would have to revoke the offer before the seller accepted it.

D

A real estate contract can be declared void if a. it is signed and not read. b. It is signed with a witnessed X. c. signed by only one party. d. it is signed by an unmarried minor.

D

The term "rescinded" in real estate means a. rewritten. b. rejected. c. reworded. d. canceled.

D

When a contract appears to be good and binding but, in fact, one of the parties may legally reject it, the contract is said to be a. unenforceable. b. valid. c. void. d. voidable.

D

unilateral contract

a contract in which one party makes a promise or begins performance without first receiving any promise to perform from the other

Voidable Contract

a contract that is able to be voided by one of its parties

void contract

a contract that is not legally binding on any of the parties that made it

competent party

a person who is considered legally capable of entering into a contract

liquidated damages

a sum of money called for in a contract that is to be paid if the contract is breached

mutual agreement

an act intended to deceive for the purpose of inducing another to part with something of value -a meeting of the minds

consideration

an act or promise given in exchange for something

counteroffer

an offer made in response to an offer

For an agreement to be enforceable it must be supported by ____________________ to demonstrate that a bargain has been struck between the parties to the contract.

consideration

specific performance

contract performance according to the precise terms agreed upon

money damages

damages that can be measured in and compensated by money

A contract that is in the process of being carried out is said to be ____________________, that is, in the process of being performed.

executory

A(n) ____________________ contract occurs when the parties to the contract declare their intentions either orally or in writing.

expressed

breach of contract

failure, without legal excuse, to perform any promise called for in a contract

A promise not to act by one or more of the parties to a contract is known as ____________________.

forebearance

forbear

not to act

As a requirement of a valid contract ____________________ and ____________________ requires that one party makes an offer to another party.

offer, acceptance

Under certain circumstances the ____________________ evidence rule permits oral evidence to complete an otherwise incomplete or ambiguous written contract.

parol

statute of frauds

requires all contracts for the sale of land to be in writing to be enforceable in a court of law

A lawsuit for _________________________ is an action in court by the innocent party to force the breaching party to carry out the remainder of the contract according to the precise terms, price and conditions agreed upon.

specific performance

offeror

the party who makes an offer

attorney in fact

the person holding a power of attorney on behalf of another

novation

the substitution of a new contract for an existing one

rescind

to cancel a contract and restore the parties involved to their respective positions before the contract was made

assign

to transfer one's rights in a contract to another person

A(n) ____________________ contract results when a promise is exchanged for performance.

unilateral

duress

use of force to obtain contract agreement

A contract that has no binding effect on the parties who made it is a(n) ____________________ contract.

void