12 Practice Questions

The appraisal on Jean's property came in at $22,000 less than the agreed-upon sales price, so the buyer, Thomas, wants to renegotiate the terms. If they can come up with a new price that is satisfactory to both parties, what will they use to document this? Addendum Amendment Annotation Appendix

Amendment

An auction where the highest bidder gets the property is called a(n) ______ auction. Absolute Minimum bid One money Reserve

Absolute

Martha made an offer to buy Drake's home, and he accepted it. Under the terms of the agreement, Martha was supposed to make an earnest money deposit of $10,000, but she only put down $5,000. Drake accepted the lesser deposit, and the sale was ultimately finalized. This is an example of ______. Accepting partial performance Rescinding the contract unilaterally Suing for damages Suing for specific performance

Accepting partial performance

Your brokerage firm uses pre-printed sales contract forms, but your seller, Marcus, wants to add some language about staying in the house and renting from the buyer for a month after closing. What should you use to add this information? Addendum Amendment Annotation Appendix

Addendum

Buyer Daphne and seller Kurt signed a sales contract with a definite closing date of May 15. Daphne then learned that she needed to move the closing date to June 15. What document should she use to make this change? Addendum Amendment Annotation Appendix

Amendment

All of the following are true regarding implied agreements EXCEPT which one? An implied agreement is based on actions or behaviors. An implied agreement is based on a formal agreement. With an implied agreement it is possible that the other party did not intend to be bound. With an implied agreement there is an increased chance of confusion.

An implied agreement is based on a formal agreement.

Most auction properties are sold ______, which means the winning bidder agrees to accept the item in its current condition. As caveat emptor As-is Fair warning Without recourse

As-is

Breanna signed a purchase offer stating she'd buy Kathy's home for $150,000. Kathy rejected that offer but said she'd sell it to Breanna for $200,000. Breanna agreed to these terms, and they added their signatures. Which of the following statements is correct? Breanna accepted the offer Kathy made. Kathy accepted the offer Breanna made. The contract is invalid. The contract is valid but unenforceable.

Breanna accepted the offer Kathy made.

Dean and Michael have an oral contract. Dean said he would sell Michael his bike in return for Michael's vinyl album collection. What does the record collection represent? An executed contract A valid contract Consideration Michael's legal competence

Consideration

Real estate sales contracts must be valid, express, bilateral, ______, and executed or executory. Enforceable Oral Unenforceable Voidable Sales contracts must be enforceable, which means they will hold up in court.

Enforceable

Which of the following is true regarding express agreements? Express agreements are implied. Express agreements are invalid. Express agreements may be written or verbal. Express agreements must be lengthy.

Express agreements may be written or verbal.

Which of the following best describes novation? It releases some of the collateral when certain mortgage conditions are met. It releases the original borrower from liability and creates a new obligation for someone else. Novation excuses someone from liability for unintentional negligent acts or omissions. Novation transfers the responsibility to pay from one person to another.

It releases the original borrower from liability and creates a new obligation for someone else.

Jenny decided to bid on a house in her neighborhood. The auctioneer announced the lowest bid that will buy the property. This is a(n) ______ auction. Absolute Minimum bid One money Reserve

Minimum bid

Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. Sam refused, and the parties agreed to cancel the deal. This is an example of ______. Accepting liquidated damages Accepting partial performance Mutually rescinding the contract Unilaterally rescinding the contract

Mutually rescinding the contract

When can specific performance be enforced under a sales contract? Both parties have fully met the terms of the contract. One or both parties have completed only a portion of the terms agreed to in the contract. One party didn't meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract. When the parties to a contract can't legally or practically do what they've agreed to do due to circumstances out of their control

One party didn't meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract.

When does substantial performance of a contract occur? Both parties fully meet the contract's terms. One or both parties have completed only a portion of the terms agreed to in the contract. One party did not meet the terms of the contract in the specified timeframe and is being required to do exactly what was agreed to in the contract. One party has met most but not all of the terms specified in the contract, and may be required to pay damages for the terms not met.

One party has met most but not all of the terms specified in the contract, and may be required to pay damages for the terms not met.

Sue Ellen has a contract to buy Roger's house, which she has always admired, when Roger decides he's ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario? Assignment Breach Novation Performance

Performance

Trent is at a(n) ______ auction, meaning that there's a confidential minimum amount that will be accepted as the winning bid. Absolute Minimum bid One money Reserve

Reserve

The UETA makes it legal and binding for contracts to be ______. Completed verbally Filed without signatures Signed electronically Written by a broker

Signed electronically

DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______. Accepting partial performance Rescinding the contract unilaterally Suing for damages Suing for specific performance

Suing for Specific performance

Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty's basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of ______. Accepting partial performance Rescinding the contract unilaterally Suing for damages and breach of contract Suing for specific performance

Suing for damages and breach of contract

Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate? Legal purpose Offer and acceptance The law of contracts The statute of frauds

The statute of frauds

Two intoxicated co-workers sign a contract in which they agree to marry each other if they're both still single when they reach age 40. Which of the following is true about this contract? This is an enforceable contract because it has a time period in which it must be completed. This is a valid contract because the parties are adults and the consideration (marriage) is legal. This is a voidable contract because the parties were intoxicated at the time they signed it. This is a void contract because it is illegal for co-workers to enter into a relationship-related agreement.

This is a voidable contract because the parties were intoxicated at the time they signed it.

Gail was supposed to close on her new home by the end of May, but she kept asking the sellers if they could push the closing date back. Soon the summer was over and she still hadn't closed. Gail was guilty of not adhering to which aspect of the contract? Assignment Novation Reasonable time Time is of the Essence

Time is of the Essence

Garrett wanted to move his real estate closing so that he can get through his wedding first. His broker and attorney encouraged him not to do it because of which contract clause? Contract novation Indemnification Liquidated damages Time is of the essence

Time is of the essence

You receive an offer in the mail that says you're eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this? Implied contract Invalid contract Unenforceable contract Unilateral contract

Unilateral contract

The statute of frauds states that if a contract transferring ownership of real property is not in writing it is __________. Enforceable Executory Void Voidable

Void

You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don't actually exist (for now), what type of contract is this? Enforceable Unilateral Void Voidable

Void

Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it? Executed Illegal Void Voidable

Voidable

Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid? No, the contract is missing a legal object. No, the contract is missing offer and acceptance. No, the contract is void. Yes, the contract is valid.

Yes, the contract is valid.