Advanced Contract Law (WA Real Estate Continuing Education 2021)
Which of these is clearly puffing as opposed to an actionable statement of opinion? "The front entry way is spectacular." "The roof has a good ten years left in it." "You could easily double your money in ten years with this property." "After repairs, you'll easily recover the value."
"The front entry way is spectacular."
What is meant by passive removal? A party to a contract is discharged due to fault with the other party. A contingency is removed automatically unless the party for whom it is written does something to remove it Contract terms and elements are removed without litigation. One party to a contract is substituted for another.
A contingency is removed automatically unless the party for whom it is written does something to remove it
What does the term passive removal describe? A contingency is removed when a certain event occurs A contingency is removed when both parties agree it longer suits their interests A contingency is removed without any affirmative action A contingency is removed when the party that has the right to waive does so
A contingency is removed without any affirmative action
Which of the following contracts are NOT assignable? A real estate sales contract. A contract for personal services. An apartment lease. A contract to buy goods on a regular basis.
A contract for personal services.
Which one of the following statements about a total or partial breach of contract is NOT correct? The more material the breach, the more likely it will be deemed a total breach If the breach is total, a contract can be terminated, and damages may result A partial breach of contract results in all further contract performance duties being discharged The difference between a total breach and a partial breach is based on the severity of the breach
A partial breach of contract results in all further contract performance duties being discharged
In which document would you likely find a liquidated damages clause? A real estate sale agreement. The closing documents for a real estate transaction. An employment contract. A promissory note
A real estate sale agreement.
Which of the following contracts would be enforceable? A contract signed by a person incapable of understanding that they were entering into a contract A rental agreement signed by a habitual drug user who was high at the time. A contract signed by a person legally declared mentally incompetent A rental agreement signed by an emancipated minor
A rental agreement signed by an emancipated minor
Andy is showing a house to a couple. While going up the stairs, he notices a soft spot under one of the steps and a squeaking noise when stepped on and says, "That's normal in older homes. A few nails will fix that squeak easily." What type of statement does Andy's response constitute if the couple buys the house and discovers that there is significant dryrot under that spot on the stairs. This would be an example of: Puffing. Concealment. Actionable statement of opinion. Undue influence.
Actionable statement of opinion.
Which of these DOES NOT discharge a party from a contract? Bankruptcy Novation Acuity Prevention of performance
Acuity
What happens when a court orders rescission and restitution as a breach of contract remedy? All parties are restored to their pre-contract state Damages are awarded to both parties The breaching party is fined The original contract is replaced with a new contract
All parties are restored to their pre-contract state
Which of the following persons CAN enter into an enforceable rental agreement? An elderly person declared incompetent by a court of law An unemancipated 14-year-old single female An emancipated 16-year-old single male An inebriated 18-year-old single female
An emancipated 16-year-old single male
Which of these would be considered a mutual mistake? The buyer neglects to insert a contingency on the property being zoned for a home business The discovery of termites after the closing of a sale An incorrect property description A missing signature
An incorrect property description
Which of the following is NOT likely to be an objective of a seller when dealing with conditions and contingencies? As a show of good faith, to allow the buyer to have as many contingencies as the buyer wants To get the buyer to waive contingencies as soon as possible to ensure that the buyer is committed to performance To give the buyer a minimal amount of time to waive any contingencies To have an offer limited to only a few necessary contingencies such as qualifying for financing
As a show of good faith, to allow the buyer to have as many contingencies as the buyer wants
Under the Statute of Frauds, which of the following contracts are NOT required to be in writing in order to be valid? Assignments of verbal month to month tenancies The sale of a personal residence A 5 year lease on an office building A lease option
Assignments of verbal month to month tenancies
Which of the following will discharge a listing agreement without further action by the parties? Laches Legality of purpose Bankruptcy Concealment
Bankruptcy
Which is not a requirement of a valid contract? Consideration expressed in monetary terms. Competent parties. Offer and acceptance. Lawful purpose.
Consideration expressed in monetary terms.
Which best describes the contract element of consideration? Consideration is something that has value to one party, and is a detriment to the other party in a contract. Consideration is something of value given by one party in exchange for something of value from another party. Consideration is defined as the thoughtfulness the parties express to each other during executory period. Consideration is something of value given to one party to a contract.
Consideration is something of value given by one party in exchange for something of value from another party.
What does it mean when a contract "ripens"? Both parties have signed the contract. The contract is fully executed and completed. Contract contingencies have all been removed, triggering the duty to perform the balance of the contract. The deadlines in the contract are passed.
Contract contingencies have all been removed, triggering the duty to perform the balance of the contract.
Which of the following terminates an offer? Counter offer Non-enforcement Emancipation Sui juris
Counter offer
If a person forces another to sign a contract at gun point, this would be an example of: Duress. Fraud in the execution. Misrepresentation. Undue influence.
Duress.
Tom forces Harry to sign a contract by threatening violence to Harry's family if he does not sign. This is a "cloud" in the formation of the contract known as Duress. Aggressive Persuasion. Undue Influence Fraud in the Execution.
Duress.
Who may claim benefit from conditions in a real estate contract? Seller. Either Buyer and/or Seller. Buyer. Neither Buyer nor Seller.
Either Buyer and/or Seller.
Including a "time is of the essence" clause in a contract means that: The contract must be carried out in 30 days. The contract remains enforceable as long as fulfillment occurs within a reasonable time of the date specified. The deadlines have already passed and damages may be imposed regardless of further action on the part of the other party. Failure to meet deadlines will result in breach of contract.
Failure to meet deadlines will result in breach of contract.
Which of these is NOT a required element of misrepresentation? A false representation Ignorance of material fact Reliance on the representation to enter into a contract The intention to deceive
Ignorance of material fact
Which statement is the definition of fraud in the execution of a contract? Actions by a party to a contract that are fraudulent once the contract has been executed. Inducing a party to sign a contract by misrepresenting the essential terms of the agreement. Anticipatory breaches that ratify a previously redundant revocation of novation. Making statements that are classified as "puffing" prior to the signing of the contract.
Inducing a party to sign a contract by misrepresenting the essential terms of the agreement.
Which of these terminates a contract? Non-performance. Insanity of offeror. Encumbrance. Unilateral execution.
Insanity of offeror.
Which one of the following statements is NOT true about contracts? It must be definite and certain and create a definite obligation It is terminated upon the revocation by the offeror prior to acceptance by the offeree It must be communicated to the offeree It will terminate on the death of the offeree, but not the offeror
It will terminate on the death of the offeree, but not the offeror
Which of these situations describes a contract that is executory? Jane contracts to wash Lynn's car every 2 weeks for the next year. After six months, Lynn is very pleased with the results. Jane offers to buy Lynn's house, but Lynn counter-offers. Jane rejects the counter-offer and walks away. Jane offers to buy Lynn's house and Lynn rejects the offer. Jane offers to buy Lynn's car on an installment plan. Jane pays all of the payments in the required timeframe and ownership is transferred.
Jane contracts to wash Lynn's car every 2 weeks for the next year. After six months, Lynn is very pleased with the results.
Which of these is one of the four required elements of a contract? Bilateral Execution. Monetary consideration Equal Exchange. Legal Object
Legal Object
What is the meaning of "sui juris"? Legal capacity to manage one's own affairs Adjudged incompetent Trial without a jury Legal purpose
Legal capacity to manage one's own affairs
What type of damages are specified in advance as the amount owed in the event of a breach of contract? Punitive damages Liquidated damages General damages Specific damages
Liquidated damages
What are liquidated damages? Liquidated damages are specified in a contract in case of breach of contract Liquidated damages are procured from selling property Liquidated damages are in excess of actual damages Liquidated damages are in addition to those specifically stated in a contract
Liquidated damages are specified in a contract in case of breach of contract
If the property address in a real estate contract had a transposed number and neither party to the contract caught the mistake, this would be an example of a: Single mistake. Non-voidable mistake. Causative mistake. Mutual mistake.
Mutual mistake.
Which of the following contract type can be enforced by specific performance? A buyer broker agreement A listing agreement A property management agreement None of the above
NOT A buyer broker agreement
Which of these statements is always true? A well-written contingency is broad in scope A well-written contingency will not use specific dates A well-written contingency will use the shortest time frames possible A well-written contingency is very specific
NOT A well-written contingency is broad in scope A well-written contingency is very specific
Unless specifically noted otherwise, who has a right to waive a contract condition? Any party may waive a contract condition. The party that does NOT benefit from it. The party that benefits from it. Neither party may waive a contract condition.
NOT Any party may waive a contract condition.
Buyer Tom wants to purchase Seller John's property. After John accepts Tom's offer and all contingencies have been satisfied, John suddenly dies before the closing date. Which one of the following statements about the purchase contract between John and Tom is true? Buyer Tom must contact the probate court to receive authorization for the purchase The property can only be sold if the administrator of John's estate ratifies the real estate contract The contract to sell John's property to Tom is now void The contract to sell John's property must be completed by John's estate
NOT Buyer Tom must contact the probate court to receive authorization for the purchase NOT The property can only be sold if the administrator of John's estate ratifies the real estate contract
Which statement is true about a contingency in a real estate sale agreement? Contingencies are only for the benefit of the buyer. Contingencies are rarely used in offers to purchase. Contingency clauses are never found in the standard Real Estate Sale Agreement. Unless an event specified in a contingency has occurred or not occurred, there may be no duty on the part of one of the parties to perform.
NOT Contingencies are only for the benefit of the buyer.
What occurs when a creditor agrees to accept a new borrower and relieve the original borrower from an obligation to pay? Estoppel Novation Exchange Substitution in fact
NOT Estoppel NOT Exchange
Which of these rules would NOT be applied to contract reformation? Handwritten material will take precedence over typed material. Interpretation that favors the public interest will be implemented. Parts of contracts that are dated earlier take precedence over other parts. If terms or provisions that should be in the contract are missing, then the court will add them.
NOT If terms or provisions that should be in the contract are missing, then the court will add them.
All of the following offers are considered terminated, EXCEPT: Mary offers to buy Jeff's condo. Jeff does not like the price offered and counters with a new price. Mary offers to buy Jeff's unimproved property, but changes her mind and sends a written withdrawal Jeff before he accepts the offer. Mary offers to buy Jeff's 4-plex and the offer stipulates a 48-hour expiration to respond. Jeff does not consider the offer worthy of his attention and ignores it. Mary offers to buy Jeff's house. Jeff accepts the offer. Shortly after acceptance, Jeff is declared incompetent.
NOT Mary offers to buy Jeff's condo. Jeff does not like the price offered and counters with a new price. NOT Mary offers to buy Jeff's unimproved property, but changes her mind and sends a written withdrawal Jeff before he accepts the offer. Mary offers to buy Jeff's house. Jeff accepts the offer. Shortly after acceptance, Jeff is declared incompetent.
A contingency in a real estate purchase agreement states, "This Agreement is contingent upon the buyer obtaining a loan in the amount of $250,000." Which one of the following statements about this contract contingency is NOT true? Once the buyer qualifies for the loan, the buyer's obligation to perform ripens into an affirmative duty This event must occur before the buyer's obligation to perform ripens into an affirmative duty Before the buyer qualifies for the loan, there is no duty for the buyer to perform the rest of the contract To qualify for the $250,000 loan, the buyer must first perform all of the contract duties
NOT Once the buyer qualifies for the loan, the buyer's obligation to perform ripens into an affirmative duty NOT This event must occur before the buyer's obligation to perform ripens into an affirmative duty
A real estate sale contract that includes an open-ended contingency stating, "This contract is contingent on the buyer finding satisfactory financing within a reasonable time" is still pending six months later because the buyer has yet to obtain a mortgage loan to purchase the property under contract. Which of the following is TRUE? The buyer can force a lender to give a loan commitment. The buyer can continue indefinitely to seek financing and the seller is locked into the agreement. The seller can cancel the contract on the grounds that the terms are vague and insufficient to constitute a meeting of the minds. The seller is entitled to the buyer's earnest money deposit.
NOT The buyer can force a lender to give a loan commitment. NOT The seller is entitled to the buyer's earnest money deposit.
"This sale subject to the buyer and property qualifying for a loan in the amount of $400,000." The buyer, although qualified to get the loan, refused to submit adequate documentation to the lender to process the loan and the transaction failed. Which statement is true? The buyer can refuse to provide the documentation to the lender and withdraw from the transaction without penalty. The buyer will lose their earnest money for failing to exercise good faith in fulfilling the terms of the contract. The buyer will be given 10 business days from the date of refusal to deliver the documents or be found in breach of the contract. The buyer's broker will be entitled to collect a full commission from the buyer for failing to perform under the terms of the contract.
NOT The buyer can refuse to provide the documentation to the lender and withdraw from the transaction without penalty. NOT The buyer can refuse to provide the documentation to the lender and withdraw from the transaction without penalty.
A condition in a contract reads: "If the buyer does not issue written disapproval of the property inspection report within seven business days, the buyer shall be deemed to have accepted the condition of the property." The buyer gets the inspection report and issues written disapproval three weeks later. Which of these statements is true in this situation? The buyer disapproved of the inspection report, so the contract did not ripen. The buyer did not respond on time, so the contract did not ripen. The buyer failed to respond on time, so the condition was met after seven business days. The buyer disapproved of the inspection report, so the agreement becomes void.
NOT The buyer disapproved of the inspection report, so the contract did not ripen. The buyer failed to respond on time, so the condition was met after seven business days.
"This offer is subject to Buyer's written approval of Buyer's inspections of the property by professional inspectors of Buyer's choosing and at Buyer's sole expense." Which statement describes what the buyer needs to do if the buyer wants to continue with the transaction after completing the professional inspections? The buyer has to wait until the seller asks for the contingency to be waived. The buyer must give written notice of approval of the inspections to the seller. The buyer does not need to do anything. The buyer needs to verbally let the seller know that the transaction is continuing because no adverse conditions were revealed by the inspections.
NOT The buyer has to wait until the seller asks for the contingency to be waived.
Which of these best describes a bilateral contract? There are two parts to the contract. Both parties make a promise to do, or not do something for the other. Only one party makes a definite promise to do or not do something. Both parties exchange something of equal value.
NOT There are two parts to the contract. Both parties make a promise to do, or not do something for the other.
Which is given the most weight when trying to determine the meaning of the contract? Typewritten material added to the contract. Handwritten material inserted into the contract. The printed form. Parol testimony used to explain the contract.
NOT Typewritten material added to the contract.
A contingency in a sale contract is a promise by the buyer or seller to perform a certain act. a condition that, if unmet, renders the contract unenforceable. an optional and unilateral action that either party may take at the request of the other party. one of several alternative actions the buyer or seller may take to satisfy contract requirements.
NOT a promise by the buyer or seller to perform a certain act.
A contract entered into due to fraud in the execution is a valid contract. voidable. void. an estoppel contract.
NOT a valid contract. NOT an estoppel contract.
Testimony offered in court to assist the court in the interpretation of a contract is known as explanatory testimony. parol evidence. executory evidence. actionable statements.
NOT explanatory testimony.
Important contracts are more likely to be _____. implied contracts unilateral contracts executory contracts express contracts
NOT implied contracts NOT unilateral contracts
When a court orders a party to perform their contractual obligations, this is known as restitution. remedial performance. specific performance. novation.
NOT restitution. NOT novation.
When a purchaser returns possession and title of the land to the seller in exchange for the seller returning the purchase price paid, minus reasonable rent for the period the purchaser was in possession of the property, a remedy known as ________ has been imposed. specific performance liquidated damages general damages rescission and restitution
NOT specific performance NOT liquidated damages
When the subject matter of a contract was legal when the contract was entered into, but a law is passed that makes it illegal, then at the time the law becomes effective the contract is voidable. valid, since it was valid at the time of formation. void. ratified.
NOT voidable.
Which of the following is TRUE if a contract does not ripen? No further performance is necessary. The contract is partially breached. A judge may order specific performance. The wronged party may seek damages.
No further performance is necessary.
Who receives an offer in a contract? Subject Receivant Offeree Recepter
Offeree
Who makes an offer in a contract? Offeror Contractor Contractee Offeree
Offeror
If a tenant under a one-year lease moves out after just three months and the owner re-rents to a different tenant one month after the tenant vacates, what damage award is the owner entitled to? Nothing One month of rent One year of rent Nine months of rent
One month of rent
A buyer includes in the purchase agreement, "This transaction is subject to the buyer financing the purchase price." In this case, who may excuse the condition? Either the buyer or seller. Only the buyer. Only the seller. Only a court.
Only the buyer.
Which of the following is NOT a necessary element in the formation of a contract? Performance Offer Consideration Acceptance
Performance
Courts categorize "satisfaction" in two ways: Satisfied and Unsatisfied Sufficient and Deficient Personal Fancy and Reasonable Person Personal Taste and Reasonable Satisfaction
Personal Fancy and Reasonable Person
Which statement is false? A novation occurs when a third party has been substituted for an original party to a contract, thereby releasing the original party from further obligation. Contract rights and duties may be assigned and delegated unless specifically prohibited by the contract. If a contract is subject to the Statute of Frauds, an assignment of the contract must be in writing. Personal service contracts are assignable.
Personal service contracts are assignable.
All of the following discharge a party from a contract EXCEPT: Ratification. Rescission. Bankruptcy Novation.
Ratification.
Which statement is TRUE? Rescission means to file for damages whereas restitution means to annul the contract. Rescission means to simply do nothing whereas restitution means to give punishment to both parties. Rescission means to cancel the contract whereas restitution means to restore both parties to their original state. Rescission means to substitute parties whereas restitution means to keep the present parties in the contract.
Rescission means to cancel the contract whereas restitution means to restore both parties to their original state.
A type of contract that is NOT assignable is a contract for: Property rental. Sale of property Personal services. A car lease.
Sale of property
What does the term "novation" describe? Adding additional terms to a contract that has already been agreed to. Reinstating a contract that has been rescinded or voided. The process of finishing a contract in its executory phase. Substituting a new party for the orignal party in the contract.
Substituting a new party for the orignal party in the contract.
Which of the following is NOT necessary to prove that a misrepresentation constituted fraud? That the statement was in writing That the statement was regarding a material fact That the person making the misrepresentation knew that the statement was false and made the statement with the intent to deceive the other party That the party to whom the misrepresentation was made acted upon it to his detriment
That the statement was in writing
The Doctrine of Laches is most similar to which other set of laws? The Statute of Edicts The Statute of Frauds The Statute of Contracts The Statute of Limitations
The Statute of Limitations
The following contingency is found in an agreement for purchase and sale: "This transaction shall be subject to Buyer obtaining gifted funds in the amount of $30,000 prior to August 1." The buyer does not obtain the funds by that date, but has other funds available to replace them. Which one of the following statements is true? The buyer may waive the condition and use other funds available to him to close the transaction Since he did not receive the gifted funds before August 1, the buyer failed to meet the condition and the transaction must be terminated The buyer can temporarily use the other funds as a placeholder but then must replace them with the gifted funds once he has obtain $30,000 The buyer can take his time collecting the $30,000 in gifted funds since the August 1st date doesn't matter
The buyer may waive the condition and use other funds available to him to close the transaction
Which is NOT a defense to fraud in the execution? The complaining party did not read the document prior to signing. The complaining party is impaired mentally. The complaining party is impaired physically (such as being blind). The complaining party is illiterate.
The complaining party did not read the document prior to signing.
"This sale subject to the verification by the buyer that the buyer's vehicle will comfortably fit into the garage." Which statement is FALSE? The condition regarding the vehicle may be waived by the seller. The condition regarding the vehicle is inserted for the benefit of the buyer and is subject to the buyer's satisfaction. If the buyer's vehicle DOES fit in the garage, the duty to perform ripens into an affirmative obligation to perform. If the buyer's vehicle does NOT fit in the garage, the duty to perform does not ripen.
The condition regarding the vehicle may be waived by the seller.
"At Buyer's expense, Buyer shall cause an inspection of the property to be conducted within 10 business days of mutual acceptance. Unless Buyer notifies Seller of unconditional disapproval within the 10 business days, Buyer shall be deemed to have waived the inspection contingency." Which of the following statements best describes the effect of the contingency as drafted? The contingency is a self-removing contingency. The contingency requires the affirmative act of the buyer's broker. The contingency requires the affirmative act of the buyer to remove the contingency. The contingency as drafted is illusory and invalid.
The contingency is a self-removing contingency.
"Buyer, at Buyer's sole expense, shall cause an inspection of the property to be conducted within 10 business days of the mutual acceptance (the "Inspection Period"). Before the expiration of the Inspection Period, Buyer may give a unilateral written unconditional disapproval of the inspections and cancel the transaction. Failure to give written unconditional disapproval of the inspections during the Inspection Period shall mean Buyer has approved the inspections and the transaction shall proceed." Which statement is true? The contingency requires written notice to the seller that the buyer has approved the inspections. The contingency as drafted is illusory and is an invalid contingency. The contingency is self-waiving because the buyer does not need to do anything to waive the condition. The contingency waiver requires the seller's signature before it can be waived by the buyer.
The contingency is self-waiving because the buyer does not need to do anything to waive the condition.
If a contract is reformed, what does this mean? The contract is rewritten by the party who disagrees with the original contract. The contract is voided by the court. The contract is rescinded by the parties. The contract is clarified by the court.
The contract is clarified by the court.
If there has been a total breach, which statement is correct? Further performance can be demanded by the non breaching party. The contract is terminated and no further consequences will result. The contract is terminated and damages will be the remaining issue. The breaching party is not excused from further performance.
The contract is terminated and damages will be the remaining issue.
Clara entered into a two-year lease for an apartment in King City. Clara was competent when entering into the lease agreement, but subsequently declared incompetent. Clara now requires a guardian to attend to her affairs. What is the status of the lease? The lease is valid. The lease is voidable at the option of Clara The lease was voided when she was determined an incompetent. The lease is voidable at the option of the apartment manager
The lease is valid.
Bob wants to list his personal residence. You suggest meeting him at the Main Street Bar to sign the listing agreement. After a number of drinks, Bob signs the listing agreement. The next morning he reads the listing agreement and finds out that the commission was 7%. Bob tells you that he refuses to pay more than 5%. You tell him that the 7% fee was discussed and he agreed to it. Which of the following statements is MOST accurate? This listing contract is enforceable, but you should modify the commission percent as a courtesy to Bob. The listing contract is voidable by Bob due to the fact that Bob had too much to drink and can't remember agreeing to the 7% commission. The listing contract is immediately void since Bob had too much to drink and can't remember. The listing contract is enforceable.
The listing contract is voidable by Bob due to the fact that Bob had too much to drink and can't remember agreeing to the 7% commission.
You wrote an offer to purchase for your Great Aunt Rebecca. The offer was presented to the seller by the seller's broker and accepted by the seller. Before the seller's broker notified you of the acceptance, Great Aunt Rebecca died. Which statement is correct? The offer contract is void. The offer contract is enforceable against the estate of Great Aunt Rebecca. The offer contract is binding because it was accepted by the seller. The offer contract is voidable.
The offer contract is void.
An offer is terminated due to all of the following EXCEPT The offeree countering the offer. The offeree rejecting the offer. The time specified for acceptance has expired. The offeror revoking the offer after notification of acceptance by the offeree.
The offeror revoking the offer after notification of acceptance by the offeree.
If a contingency in a real estate sale agreement does not occur, which statement is FALSE? The party for whose benefit the contingency was inserted can waive the contingency. The party for whose benefit the contingency was inserted is in breach of contract. The party for whose benefit the contingency was inserted will not be in breach. The party for whose benefit the contingency was inserted can be completely relieved of any further duty to perform.
The party for whose benefit the contingency was inserted is in breach of contract.
What does waiver mean? The right of the benefiting party to withdraw the condition and agree to move forward with the contract, as if the condition or contingency had never been inserted. The right the seller has to refuse to perform. The right of refusal to perform under the terms of the contract when a contingency has not been fulfilled. The right the buyer has to refuse to perform.
The right of the benefiting party to withdraw the condition and agree to move forward with the contract, as if the condition or contingency had never been inserted.
Your client makes an offer to purchase a property. The offer, as written, asks for a four-week closing date. The seller's agent calls you and asks if a six-week closing date would work for your client. Which one of the following statements is true? The seller has simply made a verbal inquiry and has not initiated a counter offer The seller has rejected the offer, but your buyer can reinstate the offer The seller has rejected your client's offer by asking to move the closing date The seller has automatically triggered a counter offer by making the verbal inquiry
The seller has simply made a verbal inquiry and has not initiated a counter offer
The difference between a void contract and a voidable contract is: The voidable contract is awaiting a court ruling on damages. The voidable contract must be voided by a court. Semantics. There is no legal difference. The voidable contract has all of the legal elements to be valid, however circumstances have opened the door for one party to cause it to become void.
The voidable contract has all of the legal elements to be valid, however circumstances have opened the door for one party to cause it to become void.
Which of the following offers is NOT considered terminated? Tom signs an offer to purchase Jerry's house, but finds out that Jerry died prior to accepting the offer. Tom signs an offer to purchase Jerry's house and gives Jerry 4 days to respond to the offer. Jerry does not respond to the offer within the time specified. Tom signs an offer to purchase Jerry's house. Jerry changes the price and the closing date. Tom signs an offer to purchase Jerry's house. Jerry signs the offer and Jerry's agent advises Tom that Jerry has signed the offer as written. Tom has changed his mind and wants out of the contract.
Tom signs an offer to purchase Jerry's house. Jerry signs the offer and Jerry's agent advises Tom that Jerry has signed the offer as written. Tom has changed his mind and wants out of the contract.
"UCC" stands for what? Uniform Commercial Contract Uniform Commercial Code Universal Civil Contract Underwriter Commitment Contract
Uniform Commercial Code
Which of the following is NOT one of the basic questions to be asked when drafting a contract condition? What effect does the action have? When must the contingency be satisfied? What is to be done? Who must act?
What effect does the action have?
A contract contingency states: "This sale is subject to the buyer's written approval of a professional inspection of the property, and all elements and systems thereof and the grounds, at Buyer's sole expense, on or before seven business days from mutual acceptance of this Agreement." What element does this statement not include? When it must be done. What happens if it is not done. Who must act. What is to be done.
What is to be done.
All of the following are basic questions that should be asked when drafting a contract condition, EXCEPT? When must the contingency be satisfied? What is to be done? What should happen after the contingency is removed? How is the contingency to be removed or satisfied?
What should happen after the contingency is removed?
Which one of the following statements about a contract condition is NOT true? When a condition fails to occur, the contract is considered "ripe" and must be rewritten If a condition fails to be met, further contract performance is no longer required The condition must occur before there is a further obligation to perform the balance of the contract A condition is inserted into an agreement by the party for whose benefit it serves
When a condition fails to occur, the contract is considered "ripe" and must be rewritten
When a court has been asked to interpret the terms of a contract that may be vague or contradictory, which of the following is most correct? When a printed form is used, the court will refuse to give more weight to the printed, typewritten or handwritten material. They are all given equal weight in contract interpretation. When a printed form is used, the typewritten material takes precedence over the handwritten material. When a printed form is used, the printed form takes precedence over the typewritten material and handwritten material. When a printed form is used, typewritten material takes precedence over the printed form, and handwritten material takes precedence over both the printed and typewritten.
When a printed form is used, typewritten material takes precedence over the printed form, and handwritten material takes precedence over both the printed and typewritten.
When drafting a contingency, as a matter of good practice, which of the following factors does NOT need to be addressed? How is the contingency to be removed or satisfied? When must the contingency be satisfied? Who will notarize the written contingency? Who must act?
Who will notarize the written contingency?
Robert writes an offer to purchase Alice's house under specified terms and conditions. Alice agrees to sell to Robert and signs the offer as written. Robert and Alice have entered into: a bilateral contract. an executed contract. an unilateral contract. a voidable contract.
a bilateral contract.
The following statement: "This house has insulation that exceeds the current building code minimum requirements" when in fact that house does not even meet the minimum requirements is fraud in the execution. a misrepresentation. coercion. puffing.
a misrepresentation.
Licensee Ahmad forgot to give his client a federal form that is required for all real estate transactions. Ahmad is guilty of negligent carelessness. a negligent misrepresentation. puffing. a negligent omission.
a negligent omission.
Ratification makes a voidable contract fully enforceable. a contract voidable. an executed contract. a contract void.
a voidable contract fully enforceable.
Damages awarded to place an injured party in the same position as before a contract was entered into are called actual damages. punitive damages. promissory damages. nominal damages.
actual damages.
Specific performance is the opposite of novation. the duty to perform. an injunction. rescission.
an injunction.
Mike wants out of his apartment lease. His friend Joe is willing to take it over for him. His contract with the apartment owner specifically allows for this, so Mike arranges for Joe to take over the lease. This action is known as _____. lease option assignment nullification subletting
assignment
Listing Agent Justin knows about a landslide that occured 5 years ago on a property he has listed, yet fails to disclose it to a buyer or the buyer's agent. Justin's failure to disclose this material fact is an example of concealment. failure to state an opinion. undue influence. fraud in the execution.
concealment.
Puffing is a type of fraud. designed to create excitement. something that should be avoided. illegal when stated by a real estate agent.
designed to create excitement.
Delegation in a contract means the transfer of _____. precedence property duties rights
duties
A contract of sale that is conditioned on the buyer's ability to enter into leases with tenants for the property before moving forward with the property's purchase is void. illusory. enforceable. unenforceable.
enforceable.
Russ represents Martin, a blind individual. Russ induces Martin to sign an agreement for purchase and sale that is materially different from the terms and conditions he orally represented to Martin were in the written document. This is an example of: fraud in the execution. mistake of fact. avoidance. promissory estoppel.
fraud in the execution.
Ratification makes a voidable contract fully enforceable. executory. void. bilateral.
fully enforceable.
Rachel hired Matthew to clean her house without specifying the amount he would get paid. This is an example of an unilateral contract. option contract. express contract. implied contract.
implied contract.
Felipe obtained a signed offer and an earnest money check from Jack, a qualified buyer. Before Felipe could present the offer to the seller, Jack called to say that he was being transferred out of town and wanted to withdraw his offer. In this case, the buyer must forfeit a part of his earnest money deposit. could be successfully sued for specific performance. is within his right to withdraw his offer. must forfeit his entire earnest money deposit.
is within his right to withdraw his offer.
Jay entered into an agreement to buy a house. He made an earnest money deposit of 3% of the offered price. All of the contingencies in the agreement are removed by Jay but he decides to back out of the agreement. Jay will give his earnest money deposit to the seller as liquidated damages. compensatory damages. provisional damages. actual damages.
liquidated damages.
The amount predetermined as the total compensation a party will receive upon the breach of a contract is known as just compensation. foreseeable damages. deferred damages. liquidated damages.
liquidated damages.
Contract law is best described as the body of rules written by an attorney for another attorney. made from common law and statutory law. comprised of common law, statutory law, and the US Constitution. comprised of common law and language from the US Constitution.
made from common law and statutory law.
Damages awarded if no actual damages can be demonstrated are called _____ damages. novational normal necessary nominal
nominal
The person who receives the offer is the _____. initiator offeree offeror maker
offeree
The person who makes an offer is the _____. offeror offeree maker initiator
offeror
In a suit for reformation, oral testimony is also known as _____. oral compilation verbal evidence oral review parol evidence
parol evidence
If a person is not satisfied with a home inspection because the house had "poor feng shui", this would not likely excuse the person from a home inspection contingency unless the contract contained a ______ clause. reasonable fancy personal fancy reasonable person variance
personal fancy
All of the following specific types of conduct or behavior make an otherwise valid contract voidable, EXCEPT: promissory estoppel. concealment. fraud in the execution. duress.
promissory estoppel.
"This house has the best view in the entire city" is an example of misrepresentation by omission. fraudulent misrepresentation. misrepresentation by commission. puffing.
puffing.
Punitive damages are awarded as a means of __________. restitution punishment annulment breach of contract
punishment
Punitive damages are awarded by a court as a kind of precedent. specific performance. punishment. restitution.
punishment.
When a contract is interpreted and clarified by a court when the two parties agree that it does not express their wishes, this is known as rescission of contract. reformation of contract. restitution of contract. ratification of contract.
reformation of contract.
John bought a farm from Case. After farming the property for one year, John realized that the representations Case made about crop yields are false. John and Case agree that a reasonable settlement is for John to deed the property back to Case and for Case to give back John's money. This remedy is an example of anticipatory damages. contract reformation. rescission and restitution. specific performance.
rescission and restitution.
Two parties enter into a contract. Later on, both parties want to cancel the contract. Doing so would require a nullification contract. rescission contract. voidance contract. novation contract.
rescission contract.
If a party in breach of contract is ordered by the court to fulfill their contractual obligations, an action for _____ has been filed. negligent representation reformation and reconstitution specific performance restitution and rescission
specific performance
A well drafted contingency is one that is written _____. specifically generally broadly exclusively
specifically
Most conditions in a real estate contract benefit the seller. the buyer. both buyer and seller. neither buyer nor seller.
the buyer.
The liquidated damages agreed to in a real estate transaction usually consist only of not more than 2% of the buyer's down payment. up to 10% of the transaction price but not less than 2% of the buyer's down payment. the amount of earnest money deposit that is left after the listing broker's expenses are reimbursed by the seller. the earnest money deposit agreed to by the buyer and seller.
the earnest money deposit agreed to by the buyer and seller.
John made an offer to purchase a home on Melody Lane. John is the vendee. the offeree. the offeror. the vendor.
the offeror.
The party that has a natural right to waive a contract contingency is No party may naturally waive a contingency. the party that opposes it. the party that objects to it. the party that benefits from it.
the party that benefits from it.
Waiver means to voluntarily give up or surrender a right. detrimental justification. estoppel. the mutual exchange of privileges.
to voluntarily give up or surrender a right.
When just one party makes a promise to do or not to do something, the contract is implied. unilateral. bilateral. executed.
unilateral.
The legal guardian for an incompetent person entered into a contract to purchase a van for the benefit of the incompetent person. After court approval, this contract would be voidable at the option of the legal guardian. valid after being ratified by the incompetent person. valid and enforcible. invalid.
valid after being ratified by the incompetent person.
The Doctrine of Laches most favors the party that is _____. exclusive accurate sincere vigilant
vigilant
A contract entered into for an illegal purpose is void. an estoppel contract. voidable. a valid contract.
void.
George applied undue influence to get his mother to agree to sell him her home at half its market value. The contract is voidable at the option of George or his mother. invalid. voidable at the option of George. voidable at the option of George's mother.
voidable at the option of George's mother.
Rescission makes a voidable contract unenforceable. contract enforceable. contract bilateral. contract executory.
voidable contract unenforceable.
A mutual mistake of fact at the time of contract formation makes a contract valid, but subject to damages. automatically void. voidable. executed.
voidable.
The following contingency is found in an agreement for purchase and sale: "If the buyer does not issue written disapproval of the property inspection report within seven business days, the buyer shall be deemed to have accepted the condition of the property." Silence on the part of the buyer at the end of seven days would mean that the condition: was NOT met and further contract performance is required. was met but further contract performance IS NOT required. was met and further contract performance is required. was NOT met and further contract performance IS NOT required.
was met and further contract performance is required.