Chapter 4.10 National Ownership

What is the statute of limitations? A set period of time during which an injured party can rescind a contract A limit on the amount of damages an injured party can claim. A clause allowing either party in a contract to withdraw within a certain period. A time limit in which to complete and sign a contract.

A set period of time during which an injured party can rescind a contract

Which of the following contracts can be assigned to another party? An exclusive listing agreement An exclusive agency agreement A contract for the sale of a house An employment contract between a broker and a salesperson

A contract for the sale of a house

What is forfeiture? The party breaching a contract to enter into an alternative contract. The party breaching a contract to give up a consideration. The party suffering the breach having the right to sue the breaching party. The party suffering the breach seizing property from the breaching party.

The party suffering the breach seizing property from the breaching party.

A homeseller signs a listing agreement with a broker and the next week decides not to sell and revokes the listing. Which of the following is true? The seller has no contractual obligations to the broker. The contract remains in full force until the expiration date. The broker may have a claim for damages. The seller cannot sign a listing agreement with another broker.

The broker may have a claim for damages.

A buyer submits an offer to a seller and then dies in a car accident. Before learning of the buyer's death, the seller accepts the offer. Which of the following is true? The seller can force the buyer's estate to go through with the purchase. The buyer's death terminated the offer. The seller must make a new offer with the same terms to the buyer's heirs. The buyer's heirs have the option of enforcing the contract.

The buyer's death terminated the offer.

An implied contract may be deemed to exist if the parties do not disavow an express contract that has expired. the parties act as if there is a contract. an offering party does not receive written notice that the offer has been rejected. the parties promise to perform their part of the agreement if the other party performs.

the parties act as if there is a contract.

Which of the following is a legally-required element of a valid and enforceable real estate contract? Notarized agreement Valuable consideration An offer Earnest money

Valuable consideration

A breach of contract is a termination of the contract by the mutual consent of the parties. financial damage suffered by a party because another party has nullified a contract provision. a lawsuit to force a party to discharge the contract. the failure of a party to perform according to the terms of the contract.

the failure of a party to perform according to the terms of the contract.

The necessary condition of mutual consent may be found lacking in a contract if the two parties did not discuss every possible interpretation of the contract's provisions. the offer that was accepted is vague. one party did not have the legal authority to sign the contract. the agreement is unwritten.

the offer that was accepted is vague.

If an offeree alters any part of an offer and then signs it, the offeror must accept the contract with its alterations. the original offer is extinguished and the offeror is not bound by any agreement. the original offer becomes a contract with the alterations subject to acceptance or rejection by the offeror. the altered offer is a valid contract.

the original offer is extinguished and the offeror is not bound by any agreement.

Which of the following statements about contract revocation is TRUE? It may not relieve the revoking party of contract obligations. It cancels all obligations of both parties. It can only be used if both parties agree to the revocation. It leaves the non-revoking party without any legal remedies.

It may not relieve the revoking party of contract obligations.

Which of the following statements about who may prepare contracts is TRUE? Real estate agents may not complete leases, mortgages, contracts for deed, or promissory notes to which they are not a party. Only lawyers may use promulgated sales contract forms. Real estate agents may legally prepare real estate contracts if they are supervised by an attorney. The "broker-lawyer accords" prevalent in most states allow real estate agents to act as temporary attorneys while writing contracts.

Real estate agents may not complete leases, mortgages, contracts for deed, or promissory notes to which they are not a party.

A buyer makes an offer with a 48-hour expiration time. 12 hours later, she changes her mind and informs the seller that the offer is withdrawn? What is the status of the offer? The offer remains an offer until the expiration time has passed, and the seller may accept it. The contract is invalid but enforceable; the seller may sue for breach of contract. The offer is extinguished along with the seller's right to accept it. The contract is valid but unenforceable unless the buyer reinstates it within the original expiration period.

The offer is extinguished along with the seller's right to accept it.

In which circumstances would a buyer most likely sue for specific performance? He found out that the property was a dominant tenement. The seller backed out of the original sales contract. The broker misrepresented the size of the lot. The broker misrepresented the value of the property.

The seller backed out of the original sales contract.

When does an offer become a contract? When the offer is presented to the offeree When the offeree gives the offeror notice of the acceptance When the offeree initials the details of the offer When the offeree signs the offer/counteroffer and delivers the signed copy to all parties.

When the offeree signs the offer/counteroffer and delivers the signed copy to all parties.

An implied contract may be deemed to exist between parties if a written contract has expired but the parties have not acknowledged the termination. the parties have been working together for a statutory period of time. any of the parties acts as if there is a contract. the parties have an express oral agreement.

any of the parties acts as if there is a contract.

All of the following will terminate a contract EXCEPT performance of the contract. mutual agreement to cancel the contract. assignment of the contract. abandonment of the contract.

assignment of the contract.

A bilateral contract is one in which both parties promise to do something in exchange for the other party's performance. both parties receive equal consideration. both parties agree to perform a service. one party promises to do something if the other party performs first.

both parties promise to do something in

If a state allows for a cooling-period rescission in the contracting process, a party may extend the expiration period for accepting or rejecting an offer. cancel a contract within a statutory period for any reason with no penalty. revoke a contract at any time before the other party has performed its obligations. return the contract to the status of an offer or counteroffer that has not yet been accepted.

cancel a contract within a statutory period for any reason with no penalty.

A contract that conveys an interest in real estate must contain a legal description of the property. be written on a form approved by the state bar association. be either nuncupative or holographic. be recorded within three days to be enforceable.

contain a legal description of the property.

A person sells a summer cottage appraised at $100,000 to a stranger for $50,000. The seller's family wants to challenge the validity of the sale contract. The most apparent weakness of the contract that they might be able to attack is the illegality of the contract's intent. insufficiency of the consideration exchanged for the property. lack of consent on the part of the seller's family. lack of good faith on the part of the buyer.

insufficiency of the consideration exchanged for the property.

An adhesion contract binds parties who have contracted with each other repeatedly. establishes terms of agreement between an employer and a contract employee. imposes exclusivity on both parties. offers one party only the option of accepting or rejecting the contract.

offers one party only the option of accepting or rejecting the contract.

The valuable consideration necessary to make a contract valid must be money. something tangible. something specifically offered in exchange for something else. something of equal value with whatever is received in exchange.

something specifically offered in exchange for something else.

Oral contracts are always illegal. sometimes valid, but never enforceable. sometimes valid, but possibly unenforceable. no different from implied contracts in the eyes of the law.

sometimes valid, but possibly unenforceable.

An unconscionable contract is one that illegal in purpose. gives one party only the option of accepting or rejecting the contract. is triggered by unforeseeable, random events. takes unfair advantage of the party with weaker bargaining power.

takes unfair advantage of the party with weaker bargaining power.

In a suit for damages by reason of default, the damaged party may claim liquidated damages if the contract stated a specific amount due to a damaged party. the contract stated that a defaulting party could not profit from the contract. the defaulting party owns property that can be foreclosed to pay the damages. the contract stated that a damaged party could take legal action to enforce the contract.

the contract stated a specific amount due to a damaged party.