Chapter 14

The following people participated in the preparation of a false, fictitious real estate contract which which was submitted to a lending agency. Which ones are guilty of substantial misrepresentation? 1. Buyer and real estate broker. 2. Seller and sales associate. 3. Both 1 and 2. 4. Neither 1 nor 2.

1. Buyer and real estate broker 2. Seller and sales associate.

The Statute of Frauds, as applied to real estates contracts, requires that 1. all contracts for the sale of real property, in order to be enforceable, must be in writing. 2. such contracts must be signed by the party to be charged thereby. 3. both 1 and 2. 4. neither 1 nor 2.

1. all contracts for the sale of real property, in order to be enforceable, must be in writing 2. such contracts must be signed by the party to be charged thereby

A contract may be discharged by 1. performance of the parties. 2. Mutual assent of the parties. 3. Both 1 or 2. 4. Neither 1 nor 2.

1. performance of the parties 2. mutual assent of the paries

The Statute of Frauds 1. requires all real estate contracts to be in writing. 2. prohibits oral real estate purchase contracts. 3. both 1 and 2. 4. neither 1 nor 2.

4. neither 1 nor 2.

What is a rescission of a contract? 1. A ratification of a contract by all parties. 2. A return to the situation as it was before the contract was executed. 3. A revision in the terms of a contract. 4. A transfer of responsibility from one of the parties to the contract to an interested third party.

A return to the situation as if was before the contract was

The Statute of Frauds involves contacts which must be in writing to be enforceable. Which of the following falls within the Statute of Frauds? 1. A contract for the sale of real property. 2. A contract for the sale of an interest in real estate. 3. A contract for the leasing of real property for two years. 4. All of these.

All of these. 1. A contract for the sale of real property 2. A contract for the sale of an interest in real estate 3. A contract for the leasing of real property for two years

In which of the following circumstances would a contract be terminated by acts of the parties? 1. Death of either party. 2. Financial impossibility. 3. Completion of the objective of the contract. 4. Bankruptcy of either party.

Completion of the objective of the contract

Which of the following does not terminate an offer to sell real estate? 1. Lapse of reasonable time. 2. Rejection of the offer by the offeree. 3. Death of the sale associate. 4. A revocation of the offer.

Death of the sale associate

Noah Count, buyer, defaulted on his sales contract with Don Trodden, the seller. Trodden may 1. cancel and declare the contract forfeited. 2. sue for specific performance. 3. sue Count for damages. 4. Do any of these.

Do any of these

Competent parties are essential for the validity of a contract. In addition, which of the following is (are) required? 1. Legality of objective. 2. Recording. 3. Acknowledgement. 4. All of these.

Legality of objective

It is said that a valid contract must have legality of object. Which of the following best describes "legality of object"? 1. All parties are of legal age and agree upon the legal consideration to be paid. 2. The contract must not be for an illegal purpose or against public policy. 3. Either party has the legal right to cancel the contract, provided legal notice is given. 4. An agreement between competent parties that is legally enforceable.

The contract must mot be for an illegal purpose or against public policy

Mr. Weak made a bona fide offer to buy property listed with you. As the licensee, you present the offer the next morning and leave your principal a signed copy of the acceptance. That afternoon you are shocked to learn that Mr. Weak died the previous night. Base on this information, which of the following would be best describe this situation? 1. Weak's death terminated the offer. 2. The contract would be binding on Weak's heirs, assigns and successors. 3. While the contract would be binding, it would be difficult to enforce. 4. Both B and C.

Weak's death terminated the offer

A broker, if involved in the utilization of dual contracts is 1. justified in the action as long as no one gets hurt. 2. a party to a fraud. 3. well within the limits of the law. 4. functioning legally as long as everyone involved knows of the arrangement.

a party to fraud

A valid and binding contract for sale of real estate must 1. be entered into by competent parties. 2. be bound by a consideration. 3. cover a legal and moral act. 4. all of the above.

all of the above. 1. be entered into by competent parties 2. be bound by a consideration 3. cover a legal and moral acts

For a real estate contract to be binding and enforceable, it must be 1. entered into by competent parties and bound by consideration. 2. for a legal or moral act, in writing, and have an offer and acceptance. 3. both 1 and 2. 4. neither 1 nor 2.

both 1 and 2. 1. entered into by competent parties and bound by consideration 2. for a legal or moral act,

In anticipation of a breach of contract, the parties may specify in the contract the amount of damages to be paid in case of a breach. This is known as the 1. collectable damages clause. 2. liquidated damages clause. 3. the habendum clause. 4. declaratory evidence clause.

liquidated damages clause

Mr. Ree is a trustee of the estate of a minor, Miss Young. He persuades her by threats to sell her land to a dummy corporation that he has formed. Unfortunately, unknown to him, the land floods each spring when the snow thaws and remains under water for months. When he discovers this fact, Mr. Ree asks the court to void the sale because of his mistake. The court should. 1. void the contract because of duress. 2. void the contract because of the mistake. 3. not void the contract because only he had made a mistake. 4. not void the contract because he is not the innocent party.

not void the contract because he is not the innocent party

The substitution of a new contract and/or party for an existing one is a(n) 1. breach. 2. option. 3. novation. 4. subterfuge.

novation

Under the Statute of Frauds all contracts for the sale of real estate must be in writing to be enforceable in court. The principle reason for this statute is to 1. prevent the buyer from defrauding the seller. 2. prevent perjury and fraudulent proof of a fictitious oral contract. 3. protect the buyer from the broker. 4. protect the general protect from fraud due to unrecorded deeds.

prevent perjury and fraudulent proof of a fictitious oral contract

The withdrawal of an offer before acceptance is a 1. reversion. 2. rescission. 3. rejection. 4. revocation.

revocation

The Uniform Vendor and Purchaser Risk Act provides that when property under contract of sale is destroyed by fire prior to the transaction being closed, at no fault of the purchaser who is not in possession. The assumption of risk falls upon the 1. buyer. 2. seller. 3. lender. 4. insurance company.

seller