Law of Contracts Exam Prep Complete Questions & Answers, Exams of Commercial Law

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Law of Contracts Exam Prep Complete Questions & Answers All of the following acts on the part of a real estate broker would constitute steering and thus be prohibited under the Fair Housing Act EXCEPT: A) directing a prospective buyer of one minority group to work only with a salesperson of the same minority group and to look at areas dominated by that minority group B) directing a member of one minority group away from properties located in areas dominated by other races C) referring a member of one minority group to properties located only in areas dominated by members of the same group D) directing a minority buyer to an expensive subdivision - ANSWER D) directing a minority buyer to an expensive subdivision The One-to-Four Family Residential Contracts states: A) only the buyer needs to sign the contract B) licensees cannot give legal advice C) no more than four people may live on the property D) it may be used for condominiums - ANSWER B) licensees cannot give legal advice Which listing is a non-exclusive agreement that lets the owner sell the property by themselves? A) Open listing B) Net listing C) Exclusive Agency listing D) Exclusive Right To Sell listing - ANSWER A) Open listing In the deed, the clause which sets forth the extent of the title being conveyed is: A) hereditaments B) the demising clause C) the indenture clause D) the habendum clause - ANSWER D) the habendum clause When one of the parties of a contract may legally reject it, the contract is said to be: A) voidable B) void C) unenforceable D) valid - ANSWER A) voidable Listing contracts obtained by a real estate salesman are considered to be: A) the salesman's own property B) his personal property C) the property of the employing broker D) negotiable instrument - ANSWER C) the property of the employing broker The seller and buyer enter into an oral contract and a written contract concerning the same property. Which contracts will prevail in court? A) written contract B) oral contract C) the contract offering the highest price for the property D) the contract offering the lowest price for the property - ANSWER A) written contract A contract that has no legal effect because it does not contain all the essential elements of a contract is: A) voidable B) unenforceable C) void D) canceled - ANSWER C) void Which form is required for use in Texas for listing a property for sale? A) The TREC promulgated listing agreement B) The Texas Association of Realtors listing agreement C) Any form may be used with the agreement of both parties D) The form required by the broker listing the property - ANSWER B) The Texas Association of Realtors listing agreement Whose signature is required on a deed? A) grantor B) grantee C) trustee D) legatee - ANSWER A) grantor If a listing contract ends with the sale of the property, which of the following true? A) an implied agency relationship exists for a period of time B) both principals must agree that the agency relationship has ended C) the agency relationship of the seller and the listing broker continues until one of the parties formally terminates it D) the agency relationship of the seller and the listing broker ends at this time - ANSWER ... By agreement, one party to a contract was discharged and another party took her place, an act known as: A) recission B) reformation C) novation D) accord and satisfaction - ANSWER C) novation A) reciprocity B) covenant of seisin C) deed of trust D) tenancy in common - ANSWER B) covenant of seisin What course is available when a broker and a salesperson have a dispute over the commission split on a transaction? A) filing a joint complaint with TREC B) filing individual complaints with TREC C) seeking mediation, arbitration, or civil court action D) complaining to the seller's attorney - ANSWER C) seeking mediation, arbitration, or civil court action A listing agent must disclose to a buyer that: A) the family next door have five children under the age of ten B) the property has been rezoned C) the property is overpriced D) the seller is moving out of town next week and needs to sell quickly - ANSWER B) the property has been rezoned Which of the following is NOT an objective or function of the Broker-Lawyer Committee? A) Promote and encourage understanding between lawyers and brokers B) To consider controversies between brokers and lawyers and, if necessary to refer such matters to the Commission of the State Bar C) To educate the public in the correct form to use for their transaction and the proper method for completing the form D) To draft and revise uniform types of standard forms - ANSWER C) To educate the public in the correct form to use for their transaction and the proper method for completing the form What is it called when a buyer makes an offer on a property and the seller changes a few of the terms before signing and returning it to the buyer? A) conditional acceptance B) rejection C) counteroffer D) there is no term for this situation - ANSWER C) counteroffer A licensee who draws or prepares a contract while not acting as a principal and not licensed as an attorney: A) shall have the license revoked or suspended B) may have the license revoked or suspended C) is acting in the best interest of the seller if no commission is charged D) may do so provided proper disclosure is made to all parties - ANSWER A) shall have the license revoked or suspended Consideration to bind a contract may be in the form of: A) cash or cash equivalent only B) anything that the parties agree upon as long as it has monetary value C) money, promises, or services D) thoughtful treatment of the other party's feelings - ANSWER C) money, promises, or services The Texas Property Code states all of the following are exempted from "Seller's Disclosure" EXCEPT: A) from one co-owner to another co-owner B) between spouses in a divorce C) an elderly seller and an elderly buyer D) all are required to provide seller's disclosure - ANSWER C) an elderly seller and an elderly buyer The type of listing agreement that is often used to eliminate most procuring cause controversies is: A) an open listing B) an exclusive right to sell C) an exclusive agency listing D) a net listing - ANSWER B) an exclusive right to sell A buyer accepts the acts of an agent without any written agreement. What kind of situation is this? A) expressed agency B) association by act C) implied agency D) agency by ratification - ANSWER C) implied agency The agent has a fiduciary relationship that includes duties of: A) accounting, care, loyalty and obedience B) satisfaction, enlightenment and care C) seriousness, loyalty and understanding D) professionalism, integrity and competancy - ANSWER A) accounting, care, loyalty and obedience The "Seller's Disclosure of Property Condition" must be delivered to the buyer in all of the following transactions EXCEPT: A) for the sale of commercial property B) if the seller has not resided on the property in the last year C) when the seller is not assisted by a licensed real estate agent D) if the buyer has lived on the property as a tenant - ANSWER not C The Texas Real Estate Commission Broker-Lawyer Committee consists of: A) Six lawyers appointed by the state bar association, six brokers appointed by TREC and a private citizen appointed by the governor. B) Six brokers and one private citizen appointed by the governor and approved by TREC. C) Six brokers and six lawyers appointed by TREC and a private citizen appointed by the governor. D) Six brokers, six lawyers and a private citizen appointed by the governor and approved by TREC - ANSWER A) Six lawyers appointed by the state bar association, six brokers appointed by TREC and a private citizen appointed by the governor. Whenever fraud, misrepresentation or duress can be proven, the contract becomes: A) implied B) indefeasible C) void D) voidable - ANSWER not C Of the following, the largest estate or ownership in real property is: A) estate at sufferance B) estate at will C) life estate D) fee simple estate - ANSWER D) fee simple estate Who does NOT have to use the TREC promulgated forms? A) a person who has a lease for less than one year and in which the rent is over $1000 B) people who are required to use federal forms, attorneys and property owners C) no one is required to use them, but it is highly reccommended D) a licensed salesman who sells raw land - ANSWER B) people who are required to use federal forms, attorneys and property owners If a contract is not in writing, it is: A) void B) voidable C) unenforceable D) invalid - ANSWER C) unenforceable An owner died one month after signing a 6-month exclusive right-to-sell listing. The day after his death, the listing agent procured a buyer for the full list price. The administrator of the owner's estate does not wish to sell. Which of the following is a true statement? A) the buyer can obtain specific performance B) the listing broker has earned a commission C) the listing broker can obtain specific performance D) the administrator need not sell nor is he or she liable for a commission - ANSWER D) the administrator need not sell nor is he or she liable for a commission A contract by which the owner agrees with another person that he shall have the right to buy the property at a fixed price, within a certain period of time is called: A) an escrow sales contract B) a sale and leaseback C) a "time is of the essence" provision D) an option - ANSWER D) an option