Course 2: Law of Contracts Final Exam

A promise for a promise is considered a ____________ contract

Bilateral

The seller conveys personal property with a:

Bill of sale

Some of the most common mistakes in contracts are all of the following except:

Broker's Fee

What are the options of the non-defaulting party when the other defaults?

Either A or B

A far as consumer information goes, the Fair Credit Reporting Act legislation that was enacted promoted all of the following except:

Relevance

General Partnership is a flow-through business entity where profits and losses flow to the individual partners just as they do in a(n):

S Corporation

FNMA, FHLMC, GNMA, REITS describes:

Secondary markets

What is a "contingency" with regards to contracts?

Something written in a contract that makes the fulfillment of the contract dependent on certain conditions

What kind of law is handed down by the legislature?

Statutory

In order to fully comply with paragraph 6 of the One to Four Family Residential Contract (Resale) concerning the survey, the seller must provide both the current survey and the:

T-47

What is the law that established the Texas Real Estate Commission?

TRELA

Where is the law of agency defined?

TRELA

In an S corporation, the earnings of shareholders are _____________

Taxed

Paragraph 13 of the One-to-Four Family Residential Resale Contract addresses prorations. Which of the following is prorated at closing?

Taxes

This type of ownership assumes that husband and wife are one person

Tenants by entirety

The only provision in the TREC contract for which time is of the essence is the:

Termination Option section of the contract

Who is responsible for the protection of the consumer, qualifying the real estate agent, and the enforcement of professional standards?

Texas Real Estate Commission

In addition to the existing survey, what else needs to be included for the title company to consider accepting the existing survey?

The T-47 affidavit

Duress or undue influence creates what kind of contract?

Voidable

All of the following are reasons that contracts may terminate except:

When there is a suit for specific performance

What is the purpose of the Broker-Lawyer Committee?

Writing and reviewing contract forms

The Broker-Lawyer Committee has how many members?

13

The seller covenants with the buyer that the seller has not personally done anything to adversely affect the title being conveyed. What does he give to the buyer?

A special warranty deed

Involuntary alienation is not done with:

A will

What is the occupation of land to which another person has title with the intention of possessing it as one's own?

Adverse possession

An agency relationship which is created after the fact when the principle agrees to be bound by the actions of another person who is acting without authority is called:

Agency by ratification

Before closing, all of the following must be complete except:

All repairs must be completed

What is real property transferred from the seller to the buyer?

All things attached to the property and owned by the seller

After the contract has been finalized, inspections and repairs, change of assigning fees, closing dates, and disclosures are addressed on what form?

Amendments

Which is not a physical characteristic of property?

Assemblage

When should Information About Brokerage Services be discussed?

At the first substantive dialogue about a specific property

Title flaws must be dealt with, property taxes must be current, and outstanding mortgages and judgements must be resolved before the ______________

Closing

Property in Texas owned by the husband and wife that was acquired during the marriage is called:

Community property

This is a form of real property with portions designated for separate ownership and the remainder designated for common ownership.

Condominium

What does a "kick-out" clause do?

It is a clause stating that the seller can continue to market the property

Which of the following includes "Rights of Survivorship"?

Joint Tenancy

With regard to common mistakes on contracts, it is recommended that the seller's name be used on the contract as it is named in the __________

Deed

All are considered to be practicing law without a license except:

Disclose to the principal all pertinent facts

Subsurface, surface, and the air above define:

Land

Which of the following is not a TREC responsibility?

Enforcement of real estate ethics

This estate may be terminated at will of either party. It has no duration limitation.

Estate at will

The owner agrees to list the property with only one broker, however, reserves the right to sell the property themselves. This is what kind of listing?

Exclusive agency

A property whose ownership rights is vested with several owners is called a:

Timeshare

If a party to the contract defaults, what option(s) does the non-defaulting have?

Neither A or B

With this lease, the tenant pays the taxes, insurance, and maintenance.

Net lease

The ___________ is the contractual agreement to repay the debt

Note

This is a communication that gives the listener the power to conclude a contract.

Offer

At closing, which of the following is not prorated?

Option money

For a sum of money negotiated between the parties, the buyer has a time period, stated in this paragraph, for the "unrestricted right" to terminate. Which paragraph does this reference?

Option money paragraph

What gives the buyer the 'unrestricted right to terminate' within an agreed number of days for a sum of money?

Option money paragraph

Economic damages in the DTPA suit do not include:

Pain and mental anguish

Nonhomogeneity, immobility, and indestructability are examples of:

Physical characteristics of property

The consumer is not protected from the licensee under the Deceptive Trade Act for which of the following?

Practicing real estate with an expired license

Case law is defined by:

Precedents

RESPA does all of the following except:

Protect buyers from foreclosures

Land and all items attached to the property are considered:

Real property

TREC exists to protect:

The citizens of Texas

Where is the legal description of a property recorded?

The county courthouse where the property is located

Condominium ownership includes:

The interior space of the unit and a percentage of the common area

In owner financing, who receives the deed of trust?

The seller