Texas promulgated Contract Chapter 2

What are some things you can do to avoid common contract mistakes?

- Keep the contract neat - Fill in all blanks correctly - Use full names for the buyer/seller

What are some actions that would be considered practicing law without a license?

- Modifying a 2012 TREC promulgated contract to fit the buyer's current situation - Giving advice about the legal consequences of the purchase - Offering a client an opinion regarding the validity of the title

Once a contract is signed, how many days are there for automatic rescission?

0

Unilateral mistake

An error that is held by only one party.

Mutual mistake

An error that is shared by both parties.

Which of the following statements best defines "promulgated"?

A form that has been made public and its use mandated

Promulgated form

A form which was formally made public or created and mandated by TREC and is to be used by licensees for the specific purpose intended, unless there is an exception of when you do not have to use the form.

What is it called when two or more real estate companies refuse, as a group, to show and sell another real estate companies' listings?

Boycotting

Which group has the task to draft and revise contracts and forms for use by agents?

Broker-Lawyer Committee

What is contract rescission?

Contract is completely canceled

Which of the following types of sellers would most likely use a contract prepared by an attorney?

A new home builder

To be an acceptable listing contract, TREC requires that the listing form contains what items?

A provision informing the parties to the contract that commissions are negotiable

Under the Texas Real Estate License Act (TRELA), a real estate agent will not be in violation of practicing law without a license if they do what?

Fills in the blanks on a standardized contract

How is the effective date of the contract determined?

After both parties have signed/initialed the contract and all parties have been notified of such

Maria, a licensed real estate professional, is working with Juan and Augustina, who are buyers. Juan wants Maria's opinion on whether or not she thinks the title is valid. What should Maria do?

Maria should advise Juan to call the title company or his favorite attorney for this type of advice

What is it called when two or more real estate companies work together to conspire to charge the same commission?

Price fixing

Who authorizes a licensee to strike information from a contract?

Principal to the transaction

Which of the following forms are NOT promulgated by TREC?

Residential Listing agreement

Which paragraph in the One to Four Family Residential Contract (Resale), typically creates the potential for legal problems for an agent?

Special provisions

What can TREC do if a real estate agent fails to use a required contract form?

Suspend the agent's license

All of the following actions would be considered practicing law without a license except which one?

Tell the client known facts about the property that might affect the title

Boycotting

The active elimination of a third person or group from participating in free commerce.

An initial counteroffer would be best described as what?

The seller's offer to the buyer

At what point does an offer become a contract?

When all parties have signed/initialed the contracts and both parties have been notified

Contract rescission

When the contract is completely canceled and the parties restored to their position before the contract was entered into.

Contract reformation

When the written agreement is changed to reflect the parties' original understanding which is only granted if one party was not aware that the writing does not conform to the actual agreement.

When can an agent use their own forms in a transaction?

When they are buying properties for themselves

Price fixing

When two or more real estate brokers conspire together to charge the same commissions.

Counteroffer

Presenting a new offer made to the other party changing unacceptable terms contained in the original offer.

If a seller changes one item on an offer, what does that offer become?

Rejection of the entire offer

How many total members are on the Broker-Lawyer Committee?

13

In what year was the TRELA written?

1939

What is the primary purpose of TREC?

Protect the public

What is the main law that governs the real estate industry?

Real Estate License Act

Acceptance

Receiver of contract agrees to all terms of the offer. Once accepted an offer becomes a contract.

Failure to Act

Receiver of contract not making a decision at the present time.

Rejection

Receiver of the contract doesn't agree to one or more terms in the offer. Rejection frees the seller to consider other offers and it frees the buyer to consider other properties or to make another offer on the same property.

Which of the following is an exception to an agent using a TREC promulgated form?

The form is prepared and required by the property owner