MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERI, Exams of Nursing

Download MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERI and more Exams Nursing in PDF only on Docsity! MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Whether a party intends to enter into a contract is judged by ________________________. - CORRECT ANSWERS Outward objective facts, as interpreted by a reasonable person An offer is ___________________. - CORRECT ANSWERS An objective manifestation of a willingness by the offeror to enter into an agreement that creates the power of acceptance in the offeree. What are the essential terms of a contract at common law? - CORRECT ANSWERS Parties Subject matter Price Quantity What are the essential terms of a contract under the UCC? - CORRECT ANSWERS Subject matter and quantity (unless the contract is a requirements or output contract) What happens if an employment contract does not specify its duration? - CORRECT ANSWERS There is a rebuttable presumption that the employment is "at will." What if an ongoing contract doesn't specify its duration? - CORRECT ANSWERS Court will imply that the contract will last for a reasonable period of time. What terms are subject to the UCC's gap-filling provisions? - CORRECT ANSWERS Duration (reasonable) Place for delivery (the seller's place of business) Time of payment (when the buyer is to receive the goods) Assortment of goods (reasonable choice of the buyer) Price (reasonable price at time of delivery) An offer must contain words of _________, not merely words that ___________. - CORRECT ANSWERS Promise, undertaking, commitment Indicate an intention to sell or interest in buying MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Are advertisements generally considered offers? - CORRECT ANSWERS No, they are considered invitations to deal unless the ad is sufficiently specific and limiting as to who may accept (e.g., first come, first served). In what ways can offers be terminated? - CORRECT ANSWERS Lapse of time Death or mental incapacity Destruction of illegality Revocation (express or constructive) When is a revocation of an offer effective? - CORRECT ANSWERS When communicated. When is an offeror's power to revoke limited? - CORRECT ANSWERS Option UCC firm offer rule What is the UCC firm offer rule? - CORRECT ANSWERS Under the UCC, an offer to buy goods is irrevocable if: The offeror is a merchant There is an assurance that the offer is to remain open The assurance is contained in a signed writing from the offeror *No consideration needed* How does the UCC define a "merchant"? - CORRECT ANSWERS A person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved -And- Any businessperson when the transaction is of a commercial nature MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Under the UCC, if not otherwise specified, how may an offeree accept an offer? - CORRECT ANSWERS In a reasonable manner and by any reasonable means. A means of acceptance is reasonable is it was used by the offeror, used customarily in the industry, or used between the parties in prior transactions. If an acceptance is given by unauthorized means, may it nevertheless be effective? - CORRECT ANSWERS Yes, if the offeror receives the acceptance while the offer is still open. How is an acceptance via "instantaneous two-way communication" treated? - CORRECT ANSWERS As if the parties were in each other's presence. In a unilateral contract, is an offeree required to give notice that performance is complete? - CORRECT ANSWERS No, unless he has reason to know that the offeror would not learn of performance within a reasonable time, or the offer requires notice. If notice is required in a unilateral contract but not provided, the offeror's duty is discharged unless: - CORRECT ANSWERS 1) The offeree exercises reasonable diligence to notify the offeror. 2) The offeror learns of performance within a reasonable time. 3) The offer indicates that notification of acceptance is not required. What is the mirror image rule? - CORRECT ANSWERS Applies in common law. Requires that the acceptance mirror the terms of the offer. Any change to the terms of the offer, or the addition of another term not found in the offer, acts as a rejection and counteroffer. How do additional or different terms in an acceptance impact an offer under the UCC? - CORRECT ANSWERS Additional or different terms do not constitute a rejection. Under the UCC, how are additional or different terms treated if one or both parties are not merchants? - CORRECT ANSWERS Additional terms in an acceptance are treated as a proposal for an addition to the contract that must be separately accepted. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Under the UCC, if both parties are merchants, how does an additional term in an acceptance impact the contract? *** HIGHLY TESTABLE *** - CORRECT ANSWERS An additional term is automatically included unless: 1) The term materially alters the original contract; 2) The offer expressly limits acceptance to the terms of the offer; or 3) The offeror has already objected to the additional terms, or objects within a reasonable time after notice of them was received. Under the UCC, if both parties are merchants, how does the inclusion of different terms in an acceptance impact the contract? *** HIGHLY TESTABLE *** - CORRECT ANSWERS Disagreement among different jurisdictions. Most apply the "knock-out" rule, under which different terms in the offer and acceptance nullify each other, and any gaps that are created are filled using Article 2's gap- filling provisions. If an offer and purported acceptance differ to such a degree that there is no contract, but the parties have begun to perform anyway, what happens? - CORRECT ANSWERS Article 2 provides that there will be a contract, and its terms will consist of those terms on which the writings of the parties agree, together with any supplementary terms filled in by the UCC's gap-filling provisions. If goods in an auction sale are offered in lots, each lot __________. - CORRECT ANSWERS Represents a separate sale. What happens when a bid is made contemporaneously with the fall of the auctioneer's hammer? - CORRECT ANSWERS The auctioneer may, at her discretion, treat the bid as continuing the bidding process or declare the sale completed. What is the difference between a reserve and a no-reserve auction? - CORRECT ANSWERS In a reserve auction, the auctioneer may withdraw the goods any time before she announces completion of the sale. Unless otherwise stated, an auction is a reserve auction. In a no-reserve auction, the goods cannot be withdrawn after the auctioneer calls for bids, unless there are no bids within a reasonable time. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS If a bidder withdraws her bid within a reasonable time, does that operate to revive earlier bids? - CORRECT ANSWERS Nope! Does consideration exist if there is a detriment to the promisee, irrespective of the benefit to the promisor? - CORRECT ANSWERS Yesss! When is a legal detriment sufficient to constitute consideration? - CORRECT ANSWERS When it was bargained for in exchange for the promise. What is mutuality of consideration? - CORRECT ANSWERS The promise must induce the detriment, and the detriment must induce the promise. What are some forms of consideration? - CORRECT ANSWERS 1) A return promise to do something; 2) A return promise to refrain from doing something legally permitted; 3) The actual performance of some act; or 4) Refraining from doing some act. How does one distinguish between a gift and valid consideration? - CORRECT ANSWERS The test is whether the offeree could have reasonably believed that the intent of the offeror was to induce the action. If yes, there is consideration. When is a promise to make a gift enforceable? - CORRECT ANSWERS Under the doctrine of promissory estoppel if the promisor/donor knows that the promise will induce substantial reliance by the promisee, and the failure to enforce the promise will cause substantial injustice. Does a benefit conferred need to have economic value to serve as valid consideration? - CORRECT ANSWERS Nah, as long as the promisor wants it, the giving of it will constitute adequate consideration. What is the pre-existing duty rule under the common law? - CORRECT ANSWERS A promise to perform a pre-existing legal duty does not qualify as consideration. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Can a promise not to bring a legal action or to assert a particular claim or defense in such an action serve as consideration for a settlement agreement? - CORRECT ANSWERS Yes, so long as the party agreeing to forebear has an honest belief as to the validity of the claim, and there is a reasonable basis for that belief. Under what circumstances is a promise enforceable in the absence of consideration? - CORRECT ANSWERS 1) Promise to pay debt barred by the statute of limitations or bankruptcy 2) Promise to perform a voidable duty, provided that the new promise does not suffer from an infirmity that would make it, in turn, voidable. 3) Promise to pay benefits received (material benefit rule) 4) Promissory estoppel What is the material benefit rule? - CORRECT ANSWERS When a party performs an unrequested service for another party that constitutes a material benefit, the modern trend permits the performing party to enforce a promise of payment made by the other party after the service is rendered. Does not apply when the conferring party performed without the expectation of compensation. What are the requirements for promissory estoppel (i.e. for the promise to be binding)? - CORRECT ANSWERS 1) The promisor should reasonably expect it to induce action or forbearance on the part of the promisee or a third person; 2) The promise does induce such action or forbearance; and 3) Injustice can be avoided only by enforcement of the promise. What exception to the promissory-estoppel framework applies to charitable subscriptions? - CORRECT ANSWERS No proof of reliance by the charity is necessary. How does a promissory-estoppel theory operate with respect to construction contracts? - CORRECT ANSWERS An agreement not to revoke a sub-bid offer is enforceable under a theory of promissory MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS estoppel. However, the general contractor is not bound to accept it upon becoming the successful bidder for the general contract. What is a void contract? - CORRECT ANSWERS When the entire transaction is treated as a nullity, as if no contract existed. What is a voidable contract? - CORRECT ANSWERS Operates as a valid contract, unless and until one of the parties takes steps to avoid it. What is an unenforceable contract? - CORRECT ANSWERS A valid contract that cannot be enforced if one of the parties refuses to carry out its terms. What is the definition of mistake as it pertains to a defense to formation? - CORRECT ANSWERS A belief that is not in accord with the facts as to a basic assumption on which the contract was made that materially affects performance. When can a party void a contract based on a unilateral mistake? - CORRECT ANSWERS The mistaken party can void the contract if that party did not bear the risk of the mistake and either: 1) The mistake would make enforcement of the contract unconscionable; or 2) The non-mistaken party caused the mistake, had a duty to disclose or failed to disclose the mistake, or knew or should have known that the other party was mistaken. And there is an absence of serious prejudice to the non-mistaken party. What happens when both parties are mistaken as to an essential element of the contract (mutual mistake)? - CORRECT ANSWERS The contract may be voidable by the adversely affected party upon proof of the following: 1) Mistake of fact existing at the time the contract is formed; 2) The mistake relates to a basic assumption of the contract; MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS 3) The mistake has a material impact on the transaction; and 4) The adversely affected party did not assume the risk of the mistake Contract is not voidable if reformation of the contract is available to cure a mistake. When does a party bear the risk of a mistake? - CORRECT ANSWERS 1) Conscious ignorance - when she is aware at the time of the contract that she has only limited knowledge of the facts to which the mistake relates, and she accepts her limited knowledge as sufficient 2) Mistaken party's negligence - when the mistake is attributable to a party's failure to know or discover facts before entering into the contract AND the party failed to act in good faith and in accordance with the reasonable standards of fair dealing When is reformation of a writing available? - CORRECT ANSWERS 1) There was a prior agreement between the parties (oral or written); 2) There was an agreement by the parties to put that prior agreement in writing; and 3) As a result of the mistake, there is a difference between the prior agreement and the writing. If both parties agree to different terms than those they thought they were agreeing to, and neither party knows or should know of the misunderstanding, what happens? - CORRECT ANSWERS There is no contract. If one party to a contract knows or should of the other party's misunderstanding of an ambiguous term, what happens? - CORRECT ANSWERS There is a contract formed based on the meaning of the term as understood by the unknowing party. What happens when both parties to a contract know that the terms of the contract are ambiguous? - CORRECT ANSWERS No contract is formed, unless both parties intended the same meaning. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS The key is whether the party has been able to exercise free and competent judgment or whether the persuasion of the other party has seriously impaired that judgment. When a confidential relationship between contracting parties is established, the burden of proving that the contract is fair __________. - CORRECT ANSWERS May be placed upon the dominant party. When can a party void a contract based on undue influence caused by a third party? - CORRECT ANSWERS Always, unless the nonvictim party to the contract gave value or materially relied on the contract while acting in good faith and without reason to know of the undue influence. What damages are available to a victim of undue influence or duress? - CORRECT ANSWERS Restitution damages may be available. What is duress (contracts)? - CORRECT ANSWERS An improper threat that deprives a party of a meaningful choice. Does the threat of criminal prosecution constitute duress when used to induce entrance into contract? - CORRECT ANSWERS Yes, even if the threatening party honestly believes that the person would be subject to criminal prosecution. Does the threat of a civil action constitute duress when used to induce entrance into contract? - CORRECT ANSWERS No, unless the civil action is pursued in bad faith, involves the seizure of property in conjunction with the civil action, or causes the person to be unable to fulfill contractual obligations. When a party's agreement is physically compelled by duress (such as a threat of physical violence), __________. - CORRECT ANSWERS The contract is void. When a party's agreement is induced by duress, but assent is not physically compelled, ________. - CORRECT ANSWERS The contract is voidable. In what ways may a party be incompetent to enter into a contract (lack legal capacity to so enter)? - CORRECT ANSWERS 1) Infancy 2) Mental illness or defect MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS 3) Guardianship 4) Intoxication 5) Corporate incapacity When a person who is incompetent due to infancy enters into a contract, what is the effect? - CORRECT ANSWERS The contract is voidable by the infant only. May a person who entered into a contract while an infant disaffirm the contract after turning 18? - CORRECT ANSWERS Yes, both only for a reasonable time thereafter. Is a contract for necessities voidable if made by an infant, a mentally incompetent person, an intoxicated person, or a person whose property is under guardianship? - CORRECT ANSWERS When necessities are furnished to the incompetent person, the person must pay for them, but the recovery is limited to the reasonable value of the services or goods. (Quasi-contract theory) What are common statutory exceptions to the infancy rule? - CORRECT ANSWERS E.g., an education loan or an insurance contract. If an individual is adjudicated mentally incompetent, a purported contract made by the individual is _______. - CORRECT ANSWERS Void. If a person is mentally incompetent, but has not been adjudicated as such, a contract is ______. - CORRECT ANSWERS Voidable if the individual is unable to: 1) Understand the nature and consequences of the contract; or 2) Act in a reasonable manner with regard to the transaction, AND the other party has reason to know of this fact. If a person's property is under guardianship, a contract entered into by that person is ______. - CORRECT ANSWERS Void. But the person may be liable for the reasonable value of necessities. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS If a person enters into a contract when intoxicated, the contract is __________. - CORRECT ANSWERS Voidable by the intoxicated party if that person was unable to understand the nature and consequences of the transaction, and the other party had reason to know of the intoxication. The intoxicated party must act promptly to disaffirm the contract and is required to return any value received, if possible. Is a contract to perform illegal conduct void or voidable? - CORRECT ANSWERS Void. If a contract becomes illegal after it is formed, _____________. - CORRECT ANSWERS The duty to perform under the contract is discharged. What is the effect of an illegal contract? - CORRECT ANSWERS With some exceptions, illegal transactions are not recognized or enforceable, restitution is not awarded for consideration, and no remedy is available for partial performance. When is some degree of relief available based on an illegal contract? - CORRECT ANSWERS When one party was justifiably ignorant of the fact that make the contract illegal, the party may recover if the other party acted with knowledge of the illegality. If the contract does not involve illegal consideration or performance of an illegal act, and a party has substantially performed, that party may recover if she is unaware of the illegal purpose. Also, a party who has substantially performed can recover even if she knows of the illegal use that the other party intends to make of the performance, unless the performing party acted for the purpose of furthering the illegal use or the use involves grave social harm. If a contract can be separated into legal and illegal parts, then _________. - CORRECT ANSWERS Recovery may be available on the legal parts. What happens when a contracting party fails to comply with a licensing or similar requirement and is prohibited from performing an act? - CORRECT ANSWERS The contract will nonetheless be enforceable if the policy grounds are economic and the public policy for the requirement does not outweigh the interest in enforcing the promise. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS When is there no implied warranty of merchantability when one would otherwise exist? - CORRECT ANSWERS If the buyer, before entering into the contract, has examined the goods or a sample or model as fully as the buyer desires, or has refused to examine the goods. When is a warranty that goods are fit for a particular purpose implied? - CORRECT ANSWERS Whenever the seller has reason to know (from any source, not just buyer) that the buyer has a particular use for the goods, and the buyer is relying upon the seller's skill in selecting the goods. (Seller need not be a merchant for this implied warranty to apply) Can be disclaimed, but must be in writing and conspicuous Can the implied warranty of fitness for a particular purpose be disclaimed? - CORRECT ANSWERS Yes, but only if it is in writing and conspicuous. Can the implied warranty of merchantability be disclaimed? - CORRECT ANSWERS Yes. It must be conspicuous, but it need not be in writing. When the duty to perform discharged? - CORRECT ANSWERS 1) Impracticability 2) Frustration of purpose 3) Rescission 4) Release 5) Destruction or injury to identified goods When is the defense of impracticability available? - CORRECT ANSWERS 1) Performance becomes illegal after the contract is made; 2) The specific subject matter of the contract is destroyed; MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS 3) In a personal services contract, the performing party dies or becomes incapacitated; or 4) Performance becomes impracticable. If a contract is to perform services that can be delegated, _______________. - CORRECT ANSWERS It is not discharged by the death or incapacity of the party who was to perform the services. What are some situations in which performance becomes impracticable? - CORRECT ANSWERS Natural disasters, wars, trade and military embargoes, strikes, and local crop failures. NOT non-extraordinary increases in the cost of performance. What are the elements of the defense of impracticability? - CORRECT ANSWERS 1) Unforeseeable event has occurred 2) Nonoccurence of the event was a basic assumption on which the contract was made; and 3) The party seeking discharge is not at fault. When performance becomes impracticable for a seller of goods, _________________. - CORRECT ANSWERS The seller must notify the buyer. If a party assumes the risk of an event happening that makes performance impracticable, ___________. - CORRECT ANSWERS The defense of impracticability will not apply. When impracticability does not prevent a seller from delivering some of the goods, _______________. - CORRECT ANSWERS The goods must be apportioned among all of the buyers with whom the seller has contracted. The buyer may refuse to accept and may cancel the contract. If the contract provided that a specific source of supply be used, and that source of supply fails, is performance discharged even when other sources are readily available? - CORRECT ANSWERS Yes. The source must be specified in the contract. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What happens if, by no fault of either party, an agreed-upon delivery facility or method of transportation of payment becomes unavailable? - CORRECT ANSWERS Any commercially reasonable delivery method may be tendered and must be accepted. What is the defense of frustration of purpose? - CORRECT ANSWERS When unexpected events arise that destroy one party's purpose in entering into a contract, even if performance of the contract is not rendered impossible. What is required for a party to assert the defense of frustration of purpose? - CORRECT ANSWERS The event that arises must not be the fault of the frustrated party, and its nonoccurrence must have been a basic assumption of the contract. The occurrence need not be completely unforeseeable, but it must unexpected and not a realistic prospect. The frustration must be so severe that it is not within the assumed risks inherent in the contract. What is rescission? - CORRECT ANSWERS The canceling of a contract so as to restore the parties to the positions they had before the contract was made. Is consideration required for the parties to mutually rescind a contract? - CORRECT ANSWERS Yes, but the surrender of rights under the original contract constitutes consideration for the agreement to rescind. What is a contractual release? - CORRECT ANSWERS A writing that manifests intent to discharge another party from an existing duty. Under common law, must a release be supported by consideration? - CORRECT ANSWERS Yep. Under the UCC, must a release be supported by consideration? - CORRECT ANSWERS No, a claim or right can be discharged in whole or in party without consideration by a written waiver or renunciation signed and delivered by the aggrieved party. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS When is an assignment of contract rights disallowed? - CORRECT ANSWERS When they materially increase the duty or risk of the obligor or materially reduce the obligor's chance of obtaining performance. Can agree in a contract that the rights pursuant to the contract may not be assigned. - CORRECT ANSWERS Yes, but such clauses are strictly construed. If a party does assign the rights, the assignment is valid, and the party has breached. Is an assignment revocable? - CORRECT ANSWERS Yes, unless the assignment is for consideration. When is a gratuitous assignment automatically revoked? - CORRECT ANSWERS Upon the death, incapacity, or bankruptcy of the assignor. What rights are held by an assignee? - CORRECT ANSWERS All of the rights of the assignor as the contract stands at the time of the assignment, but she takes subject to any defenses that could be raised against the assignor. What happens when a contract is assigned multiple times? - CORRECT ANSWERS A subsequent assignment of the same rights revokes any prior revocable assignment. If the first assignment was irrevocable, then the first assignee will have priority over the second assignee, unless the second assignee is a bona fide purchaser for value without notice of the first assignment. In general, can contractual rights be assigned? - CORRECT ANSWERS Yes. In general, can contractual duties be delegated? - CORRECT ANSWERS Yes. In what circumstances is a party precluded from delegating contractual duties? - CORRECT ANSWERS When the other party has a substantial interest in having the delegating individual perform, or the delegation is prohibited in the contract. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS When contractual obligations are delegated, is the delegator still liable under the contract? - CORRECT ANSWERS Yes. The delegator is not released from liability, and recovery can be had against the delegator is the delegate does not perform. What is a novation? - CORRECT ANSWERS The substitution of a new contract for an old one when the original obligor is released from his promises under the original agreement. When is a novation implied? - CORRECT ANSWERS If, after delegation, the original obligor repudiates liability to the original promisee, and the obligee subsequently accepts performance of the original agreement from the delegate without reserving rights against the obligor. What is the effect of a delegate's acceptance of a delegation? - CORRECT ANSWERS Acceptance of the delegation constitutes a promise to perform, and that promise is enforceable against the delegate if the delegate has received consideration or there is a consideration substitute that makes the promise enforceable. In a contract for the sale of goods, what effect does a delegation have on the other party to the contract? - CORRECT ANSWERS It creates reasonable grounds for insecurity, and the other party may demand assurances from the delegate. If a promise is enforceable by the delegator, the other party to the contract is ____________. - CORRECT ANSWERS Treated as a third-party beneficiary of the delegation and be able to enforce the delegate's promise. With respect to contacts not involving the sale of goods for $500 or more, what is required for a writing to satisfy the Statute of Frauds? - CORRECT ANSWERS The writing must: 1) Be signed by the party to be charged (i.e., the person against whom enforcement is sought); and 2) Contain the essential elements of the deal. Need not be formal; elements may be in more than one writing; and oral evidence of the writing's existence may suffice. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Which types of contracts are covered by the Statute of Frauds? (Mr. SOUR) - CORRECT ANSWERS 1) Marriage 2) Suretyship 3) One year (cannot be performed within one year of its making) 4) UCC ($500 or more) 5) Real property contract What types of marriage contracts are subject to the statute of frauds? - CORRECT ANSWERS Contracts in consideration of marriage (not the marriage contract itself). What is a suretyship? - CORRECT ANSWERS A three-party contract, wherein one party promises a second party that the surety will be responsible for any debt of a third party (the principal) resulting from the principal's failure to pay as agreed. Which suretyship contracts are not within the Statute of Frauds? - CORRECT ANSWERS 1) Indemnity contracts: a promise to reimburse for monetary loss. 2) Main-purpose exception: if the main purpose of the surety is the surety's own economic advantage, rather than the principal's benefit. What types of real property contracts are within the Statute of Frauds? - CORRECT ANSWERS A promise to transfer or receive any interest in real property. Does not apply to the conveyance itself, but it does apply to a contract providing for the subsequent conveyance of an interest in real property. What are some examples of real property contracts that fall under the Statute of Frauds? - CORRECT ANSWERS 1) A promise to create an interest in real property MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS 3) Separate deal 4) Condition precedent to the existence of the contract 5) Ambiguity and interpretation (Plain meaning rule -or- context rule) 6) Subsequent agreements 7) UCC Rule - Trade Usage and Course of Dealing or Performance What constitutes "course of performance" parol evidence under the UCC? - CORRECT ANSWERS A course of performance is a sequence of conduct that is relevant to understanding an agreement between the parties if: 1) The agreement involves repeated occasions for performance by a party; and 2) The other party accepts performance without objection and with knowledge of the course of performance. How does parol evidence impact a contract under the UCC? - CORRECT ANSWERS If the express terms of a contract are inconsistent with the course of performance, course of dealing, or trade usage, priority is given as follows: 1) express terms prevail over all others 2) course of performance prevails over course of dealings and trade usage 3) course of dealing prevails over trade usage MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What constitutes "course of dealing" parol evidence under the UCC? - CORRECT ANSWERS A course of dealing is a sequence of conduct concerning previous transaction between the parties that can reasonably establish a common basis for interpreting their conduct. What constitutes "trade usage" parol evidence under the UCC? - CORRECT ANSWERS Trade usage is any practice or method of dealing in the particular business or industry that is practices with such regularity so as to justify an expectation that it will be practiced in the instant case. What is a "condition"? - CORRECT ANSWERS A future event that must take place before a party's contractual rights or obligations are created, destroyed, or enlarged. What is a "promise"? - CORRECT ANSWERS A party's obligation to act or refrain from acting. Ambiguity as to whether a contractual provision is a condition or a promise is usually resolved in favor of ____________. - CORRECT ANSWERS A promise over a condition. Express conditions must be ______________. - CORRECT ANSWERS Complied with fully unless excused; substantial performance will not suffice. What is an implied-in-fact condition in a contract? - CORRECT ANSWERS A condition deemed to be part of the contract because the nature of the agreement suggests that the parties truly intended the condition but failed to expressly include it. What is an implied-in-law condition in a contract? - CORRECT ANSWERS A condition that is supplied by the court if reasonable under the circumstances. Example: constructive condition of exchange The UCC implies a duty of _______________ on the parties when performance of one party is dependent upon the _________________ of the other party. - CORRECT ANSWERS cooperation If a party fails to cooperate, the other party may suspend her own performance without being in breach. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS If a defendant's duty is subject to a condition precedent, then the plaintiff has the burden of proving _____________ in order to recover. - CORRECT ANSWERS that the condition occurred What standard is generally used to determine whether a contactual condition is satisfied? - CORRECT ANSWERS An objective standard based upon whether a reasonable person would be satisfied. What standard is used to determine whether a condition is satisfied in contracts based upon aesthetic taste? - CORRECT ANSWERS When the aesthetic taste of a party is a condition of satisfactory performance, satisfaction is determined under a subjective standard. The party must use good faith, or a claim of dissatisfaction can be a breach. What is the constructive condition of exchange? - CORRECT ANSWERS When each party's performance can be rendered at the same time as the other party's, each party's performance is conditioned ont he other party's performance. The failure of one party to perform excuses the other party's performance. When only one party's performance of his contractual duties requires a period of time, __________________. - CORRECT ANSWERS That party must complete his performance before the other party is required to perform, unless the language or circumstances indicate otherwise. What standard is used to determine whether a party performed an implied or constructive condition? - CORRECT ANSWERS Substantial performance. Does the "substantial performance" standard generally apply to the sale of goods? - CORRECT ANSWERS Nope. What is the doctrine of substantial performance? - CORRECT ANSWERS Permits a party who substantially performs to recover on the contract even though that party has not rendered full performance. When a party intentionally furnishes services that are materially different than what he promised, does the substantial performance standard apply? - CORRECT ANSWERS Nope, it would probably be treated as a material breach. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS In an installment or divisible contract under the UCC, the right to reject is determined by a _____________ standard. - CORRECT ANSWERS Substantial conformity How is an installment contract defined in the UCC? - CORRECT ANSWERS A contract in which the goods are to be delivered in multiple shipments, and each shipment is to be separately accepted by the buyer. In an installment contract, if the seller makes a nonconforming tender or tenders nonconforming goods under one segment of the contract, the buyer can reject only if the nonconformity: - CORRECT ANSWERS Substantially impairs the value of that shipment to the buyer; and Cannot be cured. When there is nonconforming tender or a tender of nonconforming goods under one segment of a installment contract, the buyer may cancel the contract only if the nonconformity ______________________. - CORRECT ANSWERS Substantially impairs the value of the entire contract to the buyer. If a breach is minor, the nonbreaching party may be able to recover damages, but ___________. If the breach is material, ______________. - CORRECT ANSWERS that party also still must perform under the contract the nonbreaching party does not need to perform What is anticipatory repudiation (common law)? - CORRECT ANSWERS When a promisor repudiates before performance is due. Repudiation must be clear and unequivocal, by acts or words. What are the promisee's options when the promisor repudiates before performance is due? - CORRECT ANSWERS The promisee can treat the repudiation as a breach or ignore it and demand performance. If the repudiation is ignored, continued performance by the promisee must be suspended if it would increase the damages for which the promisor would be responsible. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS In what circumstances must an aggrieved party wait to file suit in response to an anticipatory repudiation? - CORRECT ANSWERS When the date of performance has not passed and the only performance left is payment. The aggrieved party must wait for the actual breach. Repudiation may be retracted until such time as the promisee ___________. - CORRECT ANSWERS Acts in reliance on the repudiation; Signifies acceptance of the repudiation; or Commences an action for breach of contract. Does the doctrine of anticipatory repudiation apply to unilateral contracts? - CORRECT ANSWERS No way. How can a prospective inability to perform impact a contract under the UCC? - CORRECT ANSWERS A party can demand assurance if there are reasonable grounds for insecurity about the other party's willingness or ability to perform. Once the assurances are requested, the party may suspend performance until they are provided. Failure to give adequate assurances within 30 days can be treated as a repudiation. Even then, the repudiating party can still retract his repudiation until his next performance is due, or if the other party has materially changed his position or otherwise indicated that he considers the repudiation is final. When does anticipatory repudiation occur under the UCC? - CORRECT ANSWERS When there has been an unequivocal refusal of the buyer or seller to perform, or when reasonable grounds for insecurity arise with respect to the performance of either party, and the other party fails to provide reasonable assurances within 30 days. What remedies are available for a repudiation under the UCC? - CORRECT ANSWERS Any remedy given by the contract or code. When both parties are merchants, what is the standard for determining whether there are reasonable grounds for insecurity about the other party's performance? - CORRECT ANSWERS Commercial standards. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Does the acceptance of any improper delivery or payment preclude an aggrieved party from demanding adequate assurance of future performance? - CORRECT ANSWERS Nope. If expectation damages cannot be proven with reasonable certainty, what type of damages may nevertheless be available? - CORRECT ANSWERS Reliance damages. How do you calculate expectation damages? - CORRECT ANSWERS Compare the value of performance without the breach (what was promised) with the value of the performance with the breach (what was received). In construction contracts, the general measure of damages for a contractor's failure to begin or to complete a building is ____________. - CORRECT ANSWERS The difference between the contract price and the cost of construction by another builder, plus compensation for delay in completion of the construction. How are expectation damages calculated when a seller fails to deliver goods? - CORRECT ANSWERS The difference between the contract price and the market value of the goods. How are expectation damages calculated for real-estate contracts? - CORRECT ANSWERS Difference between the contract price and the market value. How are expectation damages calculated in a contract to lend money? - CORRECT ANSWERS The additional cost of obtaining a loan from another lender. How are expectation damages for defective construction work calculated? - CORRECT ANSWERS The cost of correcting the defect. How are damages for nonconformity of goods calculated under the UCC? - CORRECT ANSWERS Difference between the value of the goods as warranted and the actual value of the tendered nonconforming goods. If the award of expectation damages would result in economic waste, then courts may, instead, award ______. - CORRECT ANSWERS Damages equal to diminution in value. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS If the contract contains an enforceable liquidated-damages clause. What can a defaulting buyer recover with respect to a contract for the sale of goods? - CORRECT ANSWERS The breaching party can recover a refund of payments made on the contract less damages provable by the seller and either the liquidated-damages amount or a penalty of 20% of the value of the total performance for which the buyer is obligated, or $500, whichever is greater. Is restitution available when a contract is unenforceable or when the other party's duty has been discharged (e.g., impracticability)? - CORRECT ANSWERS Yes, a party can recover for any benefit conferred on the other party by way of part performance or reliance. What damages are recoverable in the absence of a contractual relationship between the parties (quasi-contract)? - CORRECT ANSWERS Restitution damages may be available to the extent that retention of the benefit would constitute unjust enrichment. When are reliance damages available? - CORRECT ANSWERS When the nonbreaching party incurs expenses in reasonable reliance upon the promise that the other party would perform. There is no requirement that the breaching party have benefitted from the nonbreaching party's expenditures. What factors are considered when determining whether a party may pursue equitable relief for a breach of contract? - CORRECT ANSWERS Difficulty of proving damages with reasonable certainty Hardship to the defendant Balance of the equities Practicality of enforcement Mutuality of the agreement Is specific performance available for real estate contracts? - CORRECT ANSWERS Yes, because every parcel of real property is considered unique. When is specific performance available for contracts for the sale of goods? - CORRECT ANSWERS When the goods are rare or unique, or in other circumstances (such as when there is no other convenient supplier for a type of good). MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What defenses are available to a breaching party when the nonbreaching party seeks specific performance? - CORRECT ANSWERS Equitable defenses, such as laches and unclean hands. Under the UCC, what remedies are available to a buyer when the seller fails to make a conforming tender? - CORRECT ANSWERS Damages (market price minus contract price + incidental and consequential damages) Cover (purchase goods, then recover replacement price minus contract price) Specific performance (for unique goods or other appropriate circumstances) Replevin When a buyer has made at least partial payment for identified goods, the buyer can obtain the undelivered goods from the seller if: - CORRECT ANSWERS The seller becomes insolvent within 10 days of receiving the first payment; or The goods were for family, personal, or household purposes, and the seller has repudiated or failed to deliver the goods as required by the contract. When can a buyer obtain identified, undelivered goods from the seller (without having made a partial payment)? - CORRECT ANSWERS The buyer is unable to cover; The circumstances reasonable indicate that an attempt to cover would be unavailing; or The goods have been shipped under reservation, and satisfaction of the security interest in the goods has been made or tendered. Under the UCC, if either the tender or the goods are nonconforming, ___________. - CORRECT ANSWERS The buyer has the right to accept or reject all or part of the goods. The buyer also has a right to inspect the goods before deciding whether to accept or reject. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What constitutes a valid rejection after receiving nonconforming performance? - CORRECT ANSWERS Notice to the seller; Within a reasonable time; and Before acceptance Must a buyer retain possession of rejected goods? - CORRECT ANSWERS Yes, for a reasonable time to allow for the seller to reclaim them. In the absence of other instructions from the seller, what steps can a merchant buyer take with respect to nonperishable goods? - CORRECT ANSWERS Store the goods at the seller's expense; Reship them to the seller; or Sell them for the seller's account. If goods are perishable and a seller has no local agent to whom rejected goods can be returned, what is a merchant buyer required to do? - CORRECT ANSWERS Sell the goods on the seller's behalf. What is the remedy for conversion? - CORRECT ANSWERS The fair market value of the goods at the time of the conversion. Under the UCC, a buyer accepts goods by: - CORRECT ANSWERS Expressly stating acceptance; Using the goods; or Failing to reject the goods. When may a buyer revoke an acceptance of tendered goods? - CORRECT ANSWERS If the defect substantially impairs their value to the buyer and either 1) The buyer acceptable the goods on the reasonable belief that the seller would cure the defect; or 2) The buyer accepted the goods without discover of the nonconformity, and such acceptance was reasonably induced either by (a) the difficulty of discovered the nonconformity before acceptance or (b) because the seller gave assurances that the goods were conforming. When must revocation of an acceptance occur? - CORRECT ANSWERS Before any substantial change in the condition of the goods not caused by the defect. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS If the parties do not otherwise agree, which party carries the risk of loss for unidentified goods that are damaged or destroyed by no fault of either party? - CORRECT ANSWERS The seller, until the seller satisfies the contractual delivery obligation. When goods are shipped by a third-party carrier, at what point does the risk of loss shift to the buyer? - CORRECT ANSWERS In a shipment contract, the risk of loss passes to the buyer when the seller gives possession of the goods to the carrier and makes a proper contract for their shipment. If the contract does not specify the place of delivery, it is a ____________ contract. - CORRECT ANSWERS Shipment If the contract specifies the place of delivery, it is a ____________ contract. - CORRECT ANSWERS Destination In a destination contract, at what point does the risk of loss shift to the buyer? - CORRECT ANSWERS When the seller renders at the place specified in the contract. When goods are held by a bailee and are to be transferred without being moved, when does the risk of loss pass to the buyer? - CORRECT ANSWERS When the buyer receives a negotiable document of title covering the goods or on acknowledgment by the bailee of the buyer's right to possession of the goods. Unless the parties otherwise agree, and it is neither a shipment nor a destination contract, the risk of loss passes to the buyer ___________. - CORRECT ANSWERS Upon physical possession if the seller is a merchant; otherwise, the risk passes on tender of delivery. If the seller delivers nonconforming goods, the risk of loss _______. - CORRECT ANSWERS remains on the seller until the buyer accepts or there is a cure If the buyer rightfully revokes acceptance, the risk of loss ____________. - CORRECT ANSWERS shifts back to the seller to the extent of any lack of insurance coverage by the buyer If the buyer breaches or repudiates after the goods have been identified but before the risk of loss shifts, then the risk of loss is _________________. - CORRECT ANSWERS immediately shifted to the buyer to the extent of any lack of insurance coverage by the seller MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What is the effect of the destruction of identified goods through no fault of the seller prior to the risk of loss being shifted to the buyer? - CORRECT ANSWERS Neither party is required to perform; neither party has breached. If specifically identified goods are damaged but not totally destroyed, then the contract ______________. - CORRECT ANSWERS is avoided unless the buyer chooses to take the goods at a reduced price without any other claim against the seller How long does a seller retain an insurable interest in goods? - CORRECT ANSWERS As long as the seller trains title to the goods or has a security interest in them. When does a buyer have an insurable interest in goods? - CORRECT ANSWERS As soon as the goods are identified in the contract, or, if unidentified, when the goods are shipped, marked, or otherwise designated by the seller as the goods to which the contract refers. What is the statute of limitations for breach of a sales contract under Article 2 of the UCC? - CORRECT ANSWERS Within four years after the cause of action accrues. When does a cause of action accrue under Article 2 of the UCC? - CORRECT ANSWERS When the breach occurs, regardless of whether the aggrieved party knows of the breach. When does a breach of warranty occur? - CORRECT ANSWERS When delivery is made, or, if it regards future goods, the cause of action accrues when the breach is or should have been discovered by teh aggrieved party. In what way can parties modify the applicability of the statute of limitations set forth in Article 2 of the UCC? - CORRECT ANSWERS The parties may reduce the limitations period to not less than one year, but they may not extend it past four years (the normal limitations period). When the true owner of goods sells them to another, but the sale is voidable because of fraud, lack of capacity, or because it was a cash sale and the buyer failed to pay, _______________. - CORRECT ANSWERS The buyer may transfer good title to a good-faith purchaser. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What are the "magic words" indicating that a conveyance is for a fee simple absolute? - CORRECT ANSWERS To X and his heirs. But fee simple is the default, so you can just say "To X." What are the "magic words" indicating that a conveyance is for a fee simple determinable? - CORRECT ANSWERS E.g., "so long as," "while," "during," "until" If the durational condition of a fee simple determinable occurs, when does ownership return to the grantor? - CORRECT ANSWERS Automatically as soon as the condition occurs. Is a fee simple determinable alienable, devisable, and descendible? - CORRECT ANSWERS Yes, but it is always subject to the stated condition. What future interest does a grantor hold with respect to a fee simple determinable? - CORRECT ANSWERS A possibility of reverter. Is a "possibility of reverter" an alienable interest? - CORRECT ANSWERS Yes, both during the grantor's life and upon his death. What are the differences between a fee simple determinable and a fee simple subject to a condition subsequent? - CORRECT ANSWERS Termination of a FSSCS does not occur automatically, and instead, the present fee simple will terminate only if the grantor affirmatively demonstrates intent to terminate. What the "magic words" for a FSSCS? - CORRECT ANSWERS E.g., "provided that," "on condition that," "but if" Must a grantor expressly retain the right to terminate a fee simple subject to a condition subsequent? - CORRECT ANSWERS Yes, the conveyance must contain words such as "right of entry," "right of reentry," or "power of termination." What is a fee simple subject to an executory interest? - CORRECT ANSWERS A present fee simple estate that is limited in duration by either conditional language or durational language, such that it will terminate upon the occurrence of the specified condition, and title will pass to a third party. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What is a contingent remainder? - CORRECT ANSWERS A remainder that is created in a grantee that is unascertainable, or if it is subject to an express condition precedent to a grantee's taking. The property cannot vest either because the beneficiary is unknown or the known beneficiary is subject to a condition precedent that has not yet occurred. What is the rule in Shelley's Case? - CORRECT ANSWERS Applies to contingent remainders in a grantee's heirs. The rule changes the state of the title to two successive freehold estates in the grantee, merging both the present and future interests into a fee simple absolute held by the grantee. What is the Doctrine of Worthier Title? - CORRECT ANSWERS A rule of construction similar to the rule in Shelley's Case, except that it prevents remainders in the grantor's heirs. The presumption is in a reversion to the grantor, rebuttable by a showing of contrary intent. How do courts treat a survivorship contingency? - CORRECT ANSWERS The majority view is that the contingency applies at the termination of the interest that precedes distribution of the remainder. The minority approach interprets a survivorship contingency to require surviving only the testator and not the life tenant. What is an "executory interest"? - CORRECT ANSWERS A future interest in a third party that is not a remainder and that cuts the prior estate short upon the occurrence of a specified condition. Are executory interests transferable? - CORRECT ANSWERS Yes, although they were not transferable inter vivos at common law. What is a shifting executory interest? - CORRECT ANSWERS A shifting executory interest divests the interest of the grantee by cutting short a prior estate created in the same conveyance. The estate "shifts" from one grantee to another on the happening of the condition. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What is a springing executory interest? - CORRECT ANSWERS An executory interest that divests the interest of the grantor or fills a gap in possession in which the estate reverts to the grantor. An interest held by a third party that follows a fee is always _________________. - CORRECT ANSWERS an executory interest because a remainder never follows a fee Are executory interests and contingent remainders transferable inter vivos? - CORRECT ANSWERS Yes, in most jurisdictions, even though they weren't at common law. To what interests does the Rule Against Perpetuities apply? - CORRECT ANSWERS 1) Contingent Remainders 2) Vested Remainders Subject to Open 3) Executory interests 4) Powers of appointment 5) Rights of first refusal 6) Options At what point is a future interest tested by the Rule Against Perpetuities? - CORRECT ANSWERS At the time it is created. E.g., a future interest created by a will is tested as of the testator's death. What is the effect of a future interest's failure to satisfy the RAP? - CORRECT ANSWERS Only the offending interest fails. If the transfer of a future interest is made to a class, and the Rule voids a transfer to any member of a class, ____________________. - CORRECT ANSWERS then the transfer is void as to all class members, even those whose interests are already vested (i.e. bad as to one, bad as to all) How does the rule of convenience operate to prevent the application of the RAP to a class transfer? - CORRECT ANSWERS If one member of a class has a vested remainder subject to open at the time of conveyance, then the class will close when the present estate ends. What are the two exceptions to the "bad as to one, bad as to all" rule for class transfers under the RAP? How are interests tested under those exceptions? - CORRECT ANSWERS 1) Transfers of a specific dollar amount to each class member MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS 2) Transfers to a subclass that vests at a specific time The interests are tested separately. What is the charity-to-charity exception to the Rule Against Perpetuities? - CORRECT ANSWERS If property passes from one charity to another charity, then the interest of the receiving charity is not subject to the RAP. What is the "current tenant's option" exception to the Rule Against Perpetuities? - CORRECT ANSWERS The Rule does not apply to an option to purchase the property that is held by a current leasehold tenant. What common violations of the RAP should you keep an eye out for? - CORRECT ANSWERS Class transfers - survival beyond age 21 condition Fertile Octogenarian Unborn Spouse Defeasible fee followed by an executory interest Conditional passage of interest What is the "cy pres" doctrine? - CORRECT ANSWERS Permits a court to reform a conveyance to prevent it from violating the rule against perpetuities. What is the "default" co-tenancy? - CORRECT ANSWERS Tenancy in common What are the features of a tenancy in common? - CORRECT ANSWERS Equal right to possess or use the property, regardless of the size of the interest No right of survivorship MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS expenses when calculating net proceeds. Rents are divided based on the ownership interest of each tenant. A co-tenant can collect contribution from the other co-tenants for more than his portion of ___________. However, a co-tenant does not have a right to be reimbursed by other co-tenants for ______. That co-tenant may recover such costs _____. - CORRECT ANSWERS necessary or beneficially spent operating expenses (e.g., taxes or mortgage interest) repairs made to the property, even when those repairs are necessary, or improvements in an accounting or partition Do co-tenants owe fiduciary duties to each other? - CORRECT ANSWERS In general, no, but co- tenants who became co-tenants at the same time can have a fiduciary obligation to each other, such that if one co-tenant buys back his property at a tax or mortgage foreclosure sale, the other co- tenants can reacquire their original interests by paying their due contributions. What impact does an acquisition by one co-tenant that effects the shared estate have? - CORRECT ANSWERS The acquisition is considered an acquisition by all co-tenants, per the duty of fair dealing. Do tenants in common and joint tenants have the right unilaterally partition the property? - CORRECT ANSWERS Yes, it can be partitioned voluntarily or involuntarily. Do tenants by the entirety have a unilateral right to partition the property? - CORRECT ANSWERS Nope. When is a partition by sale appropriate? - CORRECT ANSWERS When physical division of the property is not practicable or fair. Courts prefer a partition in kind, however. Is an agreement by co-tenants not to seek partition enforceable? - CORRECT ANSWERS Yes, so long as the agreement is clear and the time limitation is reasonable. What types of properties are exempted from the Fair Housing Act? - CORRECT ANSWERS In certain circumstances, owner-occupied buildings with no more than four units and single-family housing sold or rented without the use of a broker. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What are protected classes under the Fair Housing Act? - CORRECT ANSWERS Race, color, religion, national origin, sex, disability, and familial status. Exemption from familial status protection exists for certain housing for older persons. What actions are prohibited by the FHA on the basis of a protected characteristic? - CORRECT ANSWERS 1) Refusing to rent or sell housing 2) Making housing unavailable 3) Providing different housing services or facilities 4) Setting different terms for sale or rental of a dwelling 5) Falsely denying that housing is available 6) Refusing to make a mortgage loan or imposing different terms or conditions on a loan 7) Refusing to allow a disabled tenant to make reasonable modifications to the dwelling or common- use areas at his own expense 8) Refusing to make reasonable accommodations in rules, policies, practices, or services if necessary for the disabled person to use the housing 9) Threatening, coercing, intimidating, or interfering with anyone exercising a fair housing right 10) Advertising or making any statement that indicates a limitation or preference based on protected characteristics Is disparate impact sufficient to prove racial discrimination under the Fair Housing Act? - CORRECT ANSWERS Yes. Does the FHA permit zoning restrictions that limit the number of people who can occupy a home? - CORRECT ANSWERS Yes, so long as the restriction is reasonable and is not aimed at restricting the number of family members that live together, as opposed to unrelated people. What is the general conflict-of-laws rule for cases involving real property? - CORRECT ANSWERS Apply the law of the state where the property is located (law of the situs). What issues are governing by the law-of-the-situs rule? - CORRECT ANSWERS 1) validity and effect of a contract for the transfer of an interest in land by sale or lease MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS 2) whether a conveyance transfers an interest in land, and the nature of the interest 3) whether there has been a transfer of an interest in land by operation of law, and the nature of the interest 4) whether a lien creates an interest in land, and the nature of the interest created 5) the method for foreclosure of a mortgage on land and the resulting interests 6) whether an interest in land has been transferred by the exercise of a power created by operation of law (e.g., transfer of land by the executor of a will) or a power of attorney, and the nature of the interest 7) the existence and extent of an equitable interest in land 8) the passage of an interest in land upon the death of the owner by intestate succession 9) whether an interest in land escheats to the state What are the exceptions to the general law-of-the-situs rule? - CORRECT ANSWERS 1) document specifies applicable law 2) contract for the transfer of land when another state has a more significant relationship to the transaction and the parties 3) effect of marriage on an interest in land 4) collateral issues in which a different state has a more significant interest MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Does the Rule Against Perpetuities apply to future interests that revert to the grantor (reversion, possibility of reverter, right of reentry)? - CORRECT ANSWERS No! What is a tenancy at sufferance? - CORRECT ANSWERS Also called a holdover tenancy, refers to the period of time after the expiration of a lease during which the tenant remains on the premises. Is a tenant at sufferance bound by the terms of the lease that existed before the lease's expiration? - CORRECT ANSWERS Yes, including the payment of rent. How is a tenancy at sufferance terminated? - CORRECT ANSWERS If the tenant vacates the premises, the landlord evicts the tenant, or the landlord binds the tenant to a new periodic tenancy. What are a tenant's two primary duties? - CORRECT ANSWERS Pay rent Avoid Waste What are two exceptions to the duty to pay rent? - CORRECT ANSWERS Destruction of the premises Material breach by the landlord Under what circumstances is a tenant permitted to make changes to the physical condition of a leased property that increase its value? - CORRECT ANSWERS If reasonably necessary for the tenant to use the property in a reasonable manner, unless the landlord and tenant agree otherwise. If a nonresidential lease specifies that the tenant must "repair and maintain" the property, _____________________. - CORRECT ANSWERS then the tenant is generally liable for all damage to the property, unless the landlord caused the damage A residential lease that places the burden of repair on the tenant is _________________. - CORRECT ANSWERS generally void, but the tenant may be required to notify the landlord of the need for such repairs What remedy is available to a landlord when the tenant fails to pay rent? - CORRECT ANSWERS The landlord can sue both for damages and to remove the tenant from the property. A landlord could also bring an action for damages. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS At common law, if the tenant unjustifiably abandons a leasehold, _____________. - CORRECT ANSWERS then the landlord could treat the abandonment as an offer of surrender and could accept by retaking the premises What are the minority and majority rules for a landlord's duty to mitigate? - CORRECT ANSWERS Majority rule - a landlord must mitigate damages by trying to re-rent the premises and hold the tenant liable for any deficiency Minority rule - does not require the landlord to mitigate damages (more common for commercial leases) Does the doctrine of anticipatory repudiation apply to a lease? - CORRECT ANSWERS Nope! What is the effect when a landlord accepted rent after the termination of a lease? - CORRECT ANSWERS The landlord creates a periodic tenancy, even when the prior tenancy was a tenancy for years. Can a landlord impose a higher rent on a holdover tenant? - CORRECT ANSWERS Only if the landlord informs the tenant of the new rent prior to the expiration of the old lease. Otherwise, the rent of the old lease applies. If a landlord refuses to accept rent from a holdover tenant, __________. - CORRECT ANSWERS then the tenant is considered wrongfully in possession, and the landlord may evict the tenant without notice Can a landlord use self-help to remove a tenant? - CORRECT ANSWERS In most states, no. The landlord must instead (1) properly serve the tenant with notice of a lawsuit and (2) obtain a court judgment of possession. What are the duties of a landlord with respect to giving a tenant possession of the leasehold premises? (Majority and minority rule) - CORRECT ANSWERS Majority - tenant is relieved of duty to pay rent if the landlord fails to deliver actual physical possession Minority - requires only that the landlord deliver legal possession MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Which party has the duty to repair in a commercial lease? - CORRECT ANSWERS The tenant. What is the implied warranty of habitability? - CORRECT ANSWERS The landlord must maintain the property such that it is reasonably suited for residential use. A landlord's failure to comply with applicable housing code requirements constitutes a breach of this warranty, particularly with regard to violations that substantially threaten the tenant's health and safety. What are a tenant's options when the leased premises are not habitable? - CORRECT ANSWERS The tenant may choose to 1) refuse to pay rent 2) remedy the defect and offset the cost against the rent, or 3) defend against eviction When can a tenant withhold rent on the basis that the premises are not habitable? - CORRECT ANSWERS Generally, the tenant must first notify the landlord of the problem and give him a reasonable opportunity to correct it. The tenant is not required to vacate the premises. How does a landlord breach the implied covenant of quiet enjoyment? - CORRECT ANSWERS The covenant of quiet enjoyment is breached when the landlord, someone claiming though the landlord, or someone with superior title disrupts the possession of the tenant. Can off-premises actions of third parties qualify as violations of the implied covenant of quiet enjoyment? - CORRECT ANSWERS No, a landlord is not responsible for the acts of third parties, including other tenants, but the landlord does have a duty to take action against a tenant's nuisance- like behavior and to control the common areas. What is the effect of a breach of the implied covenant of quiet enjoyment? - CORRECT ANSWERS A breach of that covenant amounts to an actual or constructive eviction of the tenant. Is a tenant excused from paying rent for the entire premises if the landlord is responsible for the partial eviction? - CORRECT ANSWERS Yes. Is a tenant excused from paying rent if a third party adverse possessor/trespasser partially evicts the tenant? - CORRECT ANSWERS No. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Traditional rule - landlord may withhold permission at his discretion Does a clause that prohibits assignment automatically also prohibit subleasing? - CORRECT ANSWERS No. If a landlord knows of an assignment or sublease and does not object, has that landlord waived any objection thereto? - CORRECT ANSWERS Yes. When a landlord consents to an assignment or waives her right to object, can she object to a subsequent assignment? - CORRECT ANSWERS No (majority rule), but the prohibition does not apply to subsequent subleases. If leased property is partially condemned, must a tenant continue to make his rent payments? - CORRECT ANSWERS Yes, but the tenant is entitled to compensation for a portion of the property that was condemned or the time he was dispossessed from the leased property. If leased property is completely condemned, must a tenant continue to make his rent payments? - CORRECT ANSWERS No, and he is entitled to compensation for the taking. What is a listing agent? - CORRECT ANSWERS A real estate broker who deals directly with the seller and who may help to set the selling price and assume primary responsibilities for advertising the property for sale. What is a selling agent? - CORRECT ANSWERS A broker that serves as a subagent of the listing agent and finds a buyer for the property. In general, do the listing agent and selling agent share in the commission paid by the seller of property? - CORRECT ANSWERS Yes. Under what circumstances is a selling agent entitled to a commission? - CORRECT ANSWERS When her efforts are the procuring cause for the buyer's purchase of the property. When is a selling agent entitled to a commission for her successful efforts in inducing a sale? - CORRECT ANSWERS Upon procurement of a buyer who is ready, willing, and able to purchase the property on terms that are agreeable to the seller. Thus, generally, the right to a commission arises MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS when the contract of sale is executed or, if the contract is subject to conditions, when the conditions are satisfied, even if the sale does not take place. What is a dual agent? - CORRECT ANSWERS A broker that serves as agent for both the buyer and seller of real property. Not allowed in most states due to the likelihood of a conflict of interest. Must a contract to pay a commission to a real estate agent be in writing? - CORRECT ANSWERS Yes, in most states. To what real property instruments does the Statute of Frauds apply? - CORRECT ANSWERS 1) A land sales contract 2) A promise to create an interest in real property 3) The assignment of a right to purchase real property 4) An option contract for the sale of an interest in real property 5) A promise to give a mortgage or other lien as security What are the exceptions to the Statute of Frauds for covered real property instruments? - CORRECT ANSWERS Two of the following: 1) Payment of all or part of the purchase price 2) Possession by the purchaser, or 3) Substantial improvement of the property by the purchaser When is specific performance of a real estate contract permitted when that contract violates the Statute of Frauds? - CORRECT ANSWERS When the party seeking enforcement has reasonably relied on the contract and would suffer hardship. Can an oral land sales contract be enforced when the other party admits the existence of the contract? - CORRECT ANSWERS Yep. Is an oral rescission of a land sales contract effective? - CORRECT ANSWERS Yes, in most states. What is a marketable title? - CORRECT ANSWERS Title free of defects; title that is free from an unreasonable risk of litigation. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Must the covenant of marketable title be express? - CORRECT ANSWERS No, it is implied in a land sales contract, regardless of the type of deed created. Unless otherwise agreed, the seller is not required to deliver marketable title until _________. - CORRECT ANSWERS the closing Once the deed is delivered, the terms of the contract ______________. - CORRECT ANSWERS merge with the deed, and the deed controls Can a purchaser enforce provisions of the purchase contract after merger takes place? - CORRECT ANSWERS Nope. What are some examples of defects in title that would render it unmarketable? - CORRECT ANSWERS i) Title acquired by adverse possession that has not yet been quieted (i.e., supported by a judicial decree); ii) Future interests wherein the holders of such interests have not agreed to the transfer; iii) Private encumbrance (e.g., mortgage, covenant, option, or easement); iv) Violation of a zoning ordinance; or v) Significant physical defect (an encroachment on the land that is incurable). Are defects in title rendering a title unmarketable waiveable? - CORRECT ANSWERS Yep. What remedy is available to a buyer based on a violation of the implied covenant of marketable title? - CORRECT ANSWERS A buyer may rescind and recover out-of-pocket costs and earnest money payments, sue for breach, or bring an action for specific performance with an abatement of the purchase price (but she usually cannot do so until the date of closing). MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS When a seller's breach resulted from an inability to deliver marketable title, but the seller acted in good faith, what damages are available to the buyer (in about half of jurisdictions)? - CORRECT ANSWERS The damages are limited to out-of-pocket expenses. In an action for breach of contract in a real property transaction, can a buyer or seller recover incidental damages? - CORRECT ANSWERS Yes, both parties can. Is it permissible for a seller in a real property contract to retain the buyer's deposit (earnest money) as liquidated damages if the buyer refuses to buy the property? - CORRECT ANSWERS Yes, so long as the amount is reasonable (no more than 10% of the purchase price), with due consideration for the sophistication of the buyer and the nature of the transaction. A court may refuse to enforce a liquidated damages clause when the seller suffers no actual loss. Under the theory of mutuality of remedies, is a seller permitted to seek specific performance of a real estate contract? - CORRECT ANSWERS Yes, even though the seller typically receives money rather than land. When a buyer seeks specific performance with respect to property for which there is a title defect (e.g., an encumbrance), _____________. - CORRECT ANSWERS the buyer may also obtain an abatement in the purchase price to compensate the buyer for the defect What is the doctrine of equitable conversion? - CORRECT ANSWERS A doctrine under which, although the seller retains legal title to real property during the pendency of the land sales contract, equitable title passes to the buyer upon entering the contract. The seller effectively holds the property in trust for the buyer. When an action is maintained against the seller for a claim that arose prior to the execution of the contract, a judgment obtained against the seller after the execution of the contract _________ enforceable against the real property. - CORRECT ANSWERS is not Under the doctrine of equitable conversion, the seller's interest is converted by the contract into an interest in the proceeds from the sale; it is no longer an interest in the real property itself. Following the logic of the doctrine of equitable conversion, most states place the risk of loss during the time between the execution of the contract and the closing __________. - CORRECT ANSWERS on the buyer, regardless of whether the buyer takes possession of the property, unless the loss is attributable to the seller's intentional or negligent actions MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS In the minority of states, the Uniform Vendor and Purchaser Risk Act ________________. For the Act to apply, a material part of the property must be destroyed. - CORRECT ANSWERS keeps the risk of loss with the seller, unless and until the buyer takes possession, or title is transferred Does a seller in a real estate transaction have a duty of carry casualty insurance? - CORRECT ANSWERS No, but because the buyer has an equitable interest in the property, the buyer may obtain such insurance. When the risk of loss is on the buyer and the seller has casualty insurance, ______________. - CORRECT ANSWERS the seller is generally required to give the buyer credit against the purchase price in the amount of the insurance proceeds when a casualty occurs When one of the contracting parties dies prior to the performance date of the contract, the seller's interest may be treated as _______________ and the buyer's interest may be treated as a ______________ for the purposes of distributing the property pursuant to either's will. - CORRECT ANSWERS personal property real property interest What is a deed? - CORRECT ANSWERS The legal instrument that transfers the ownership of real property. In order to transfer a real property interest, what is required? - CORRECT ANSWERS The grantor must demonstrate the intent to make a present transfer of the interest (e.g., delivery of the deed), and the grantee must accept the interest. Also, b/c of the Statute of Frauds, the transfer must be evidenced by a writing (or satisfy the one of the exceptions). Is physical transfer of a deed required in order for a real property interest to pass? - CORRECT ANSWERS No, and it is not conclusive evidence of the grantor's present intent to transfer the property. When the grantor keeps the deed to real property, intent to transfer _____________. - CORRECT ANSWERS is not presumed Is parol evidence admissible to establish whether a grantor had the intent to make a present transfer of a real property interest? - CORRECT ANSWERS Yes. However, parol evidence is not admissible to MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS show that the grantor transferred the deed to the grantee subject to an oral condition (and the condition is not enforceable). Transfer of a deed to real property to the grantee __________________. - CORRECT ANSWERS creates a presumption that the grantor intended to make a present transfer of the property interest When the grantor transfers the deed to her own agent (e.g., an attorney), the transfer is treated as if _________________. - CORRECT ANSWERS the grantor had retained the deed, even when the grantor has instructed the agent to deliver the deed to the grantee at some future time or upon the happening of an event When the grantor transfers the deed to the grantee's agent, the transfer is treated as if _________________________. - CORRECT ANSWERS it had been made to the grantee herself If a grantor in a real property transfer purportedly gives property to a grantee through a third party and places a condition on the transfer of the deed by the third party to the grantee, and the grantor retains an absolute right to recover the deed, then _____________. - CORRECT ANSWERS no valid delivery exists because transfer of title was not clearly intended If a grantor in an independent-agent-gift situation does not retain a right to retrieve a deed, the grantor ______. Instead, the conditional transfer is treated as creating a future property interest in the grantee. - CORRECT ANSWERS cannot later void the gift When a contract for the sale of real property calls for the seller to give the deed to an independent third party (i.e., an escrow agent) and conditions the release of the deed to the buyer on the happening of an event, typically payment of the purchase price, the escrow agent is obligated to ___________. - CORRECT ANSWERS transfer the deed to the buyer if and when the condition occurs When there is a written contract, the grantor cannot require the escrow agent to ______________. When the contract is oral, the grantor can _________________. - CORRECT ANSWERS return the deed prior to the failure of the condition to occur reclaim the deed from the escrow agent because the Statute of Frauds requires a writing for a land sales contract to be enforceable MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Is a deed that contains a forged grantor's signature void? - CORRECT ANSWERS Yes, even if relied upon by a BFP. Is a deed that has been procured by fraud voidable or void? - CORRECT ANSWERS Voidable, and it may be enforced by a bona fide purchaser without notice of the fraud. An agent _______ execute a deed on behalf of a principal-grantor. - CORRECT ANSWERS may What is the equal dignities rule? - CORRECT ANSWERS When the act performed by an agent on behalf of the principal is required to be in writing by law, the agent's authority must also be in writing. What are the exceptions to the equal dignities rule? - CORRECT ANSWERS An officer of an entity such as a corporation who has the authority to act on behalf of the entity by virtue of the officer's status may sign a deed without specific authorization of the corporation to do. In addition, a person whose only act is signing a specific deed at the grantor's request (i.e., an amanuensis) may do so without written authorization. Under what circumstances is a principal-grantor estopped from asserting as a defense the lack of a writing authorizing an agent's authority? - CORRECT ANSWERS When the principal has made a manifestation of an agent's authority that induces detrimental reliance by a third party. A deed is not valid at law if an agent with authority signs only her own name, but ___________________. - CORRECT ANSWERS the deed may be enforced in equity as between the parties and subsequent purchasers with notice of the existence of the agency A deed executed by a co-tenant that purports to be a conveyance of the entire jointly owned property has the effect of _____________. A purported conveyance of a physical portion of jointly owned property is _____________. - CORRECT ANSWERS conveying only that co-tenant's interest void How can a purchaser prevail under a notice recording statute? - CORRECT ANSWERS A purchaser need only purchase without notice of an unrecorded prior interest. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What words do notice recording acts usually contain? - CORRECT ANSWERS "in good faith" or "without notice" Must a bona fide purchaser record in order to prevail over a prior interest in a notice jurisdiction? - CORRECT ANSWERS No, but he must record to prevail against a subsequent purchaser. How does a purchaser's interest prevail in a race statute? - CORRECT ANSWERS By recording first. What is required for a subsequent purchaser's interest to prevail in a race-notice state? - CORRECT ANSWERS The subsequent purchaser must take the interest without notice of a prior conflicting interest and be the first to record. What words indicate a race-notice statute? - CORRECT ANSWERS "in good faith" + "first duly recorded" Must a grantee pay value in order to be entitled to protection under a recording statute? - CORRECT ANSWERS Yes. Are mortgagees considered to have "paid value" and thus, are protected by recording acts? - CORRECT ANSWERS Yes, unless the mortgage is not given simultaneously with a loan (such as when the mortgage is given after the loan is created). Creditors are protected only against claims that arise ______________________, unless otherwise indicated by statute. - CORRECT ANSWERS after a judgment lien against the debtor is recorded The majority of jurisdictions protect purchasers of property at a judicial sale against ______________. Note that a lawsuit may be pending that could affect title to the property. In such case, any party to the action may record a lis pendens (a notice of pending action), which will serve as _________________. - CORRECT ANSWERS all unrecorded interests subject to the recording act notice to third parties of the claims pending in the lawsuit Grantees who acquire title of property by gift, intestacy, or devise are __________________ by the recording act against prior claims, even those who fail to record their claims to the same property. - CORRECT ANSWERS not protected MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What is the "shelter rule" (re: recording acts)? - CORRECT ANSWERS Grantors who are protected by the recording act protect (or "shelter") their grantees who would otherwise be unprotected. The exception to the shelter rule is that a purchaser who is not a bona fide purchaser cannot convey to a bona fide purchaser and then buy back the property to obtain the status of a bona fide purchaser. A grantee possessing actual, personal knowledge of a prior interest _____________ under a notice or race-notice recording statute. - CORRECT ANSWERS cannot prevail If a reasonable investigation would have disclosed the existence of prior claims, then _____________________. The purchaser is charged with whatever knowledge a reasonable inspection of the property would have disclosed. - CORRECT ANSWERS the grantee is considered to possess inquiry notice, and she cannot prevail against those prior claims In most states, taking a quitclaim deed __________ inquiry notice of prior claims. - CORRECT ANSWERS does not in itself create Grantees are held to have constructive notice of ________________. - CORRECT ANSWERS all prior conveyances that were properly recorded When searching the chain of title, the potential purchaser must . . . . - CORRECT ANSWERS first search for the grantor's name as a grantee (to ensure good title) in the grantee index, and he must then search for the name of the grantor's grantor as a grantee, and so on, until the title has been searched back to its inception (common-law rule) or as far back as the recording statute provides. Some states have search cutoff dates. Then, the grantors are searched as grantors to verify the chain of title. Title searches also should include a search of what related searches? - CORRECT ANSWERS tax assessment and judgment lien records, as well as the marriage, divorce, and probate records for every named grantor and grantee What is a "wild deed"? - CORRECT ANSWERS A deed that is not within the chain of title Under the "estoppel by deed" doctrine, __________________. Consequently, when the grantor does acquire ownership of the land, ___________________. - CORRECT ANSWERS a grantor who conveys an interest to land by warranty deed before actually owning it is estopped from later denying the effectiveness of her deed MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What damages can a buyer recover for a breach of the covenant against encumbrances? - CORRECT ANSWERS The lesser of the difference in value between title with and without the defect, or the cost of removing the encumbrance. To recover for the covenants of enjoyment or warranty, the grantee must _________________, and the grantor must _________________. Recovery is ________. - CORRECT ANSWERS notify the grantor of the interference refuse to defend the title the lesser of the purchase price or the cost of defending the defective title How much can a party recover for a violation of the covenants of seisin, right to convey, or further assurances? - CORRECT ANSWERS The lesser of the purchase price or the cost of perfecting title. What is the after-acquired title doctrine? - CORRECT ANSWERS When a person purports to transfer real property that he does not down, and then subsequently becomes owner of the property, title to the property automatically vests in the transferee. What is the doctrine of estoppel by deed? - CORRECT ANSWERS It prevents the grantor from asserting ownership of after-acquired property that the grantor transferred before he held title to that property. What is a special warranty deed? - CORRECT ANSWERS A deed that contains the same covenants of title as a general warranty deed, but only warrants against defects arising during the time the grantor has title. What is a quitclaim deed? - CORRECT ANSWERS It promises no covenants of title. The grantee in a quitclaim deed (or a grant deed or warranty deed) receives ________ than what the grantor possessed. - CORRECT ANSWERS no better title Does recording a quitclaim deed give a grantee priority over an earlier unrecorded general warranty deed? - CORRECT ANSWERS It may. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS When a decedent does not leave a valid will or the will does not specify a taker of the real property, _____________________. - CORRECT ANSWERS The property is transferred pursuant to the applicable state law of intestate succession. When a decedent has no heir, as determined under state law, ____________. - CORRECT ANSWERS the property typically escheats to the state What is "ademption"? - CORRECT ANSWERS When a devise fails because the testator no longer owns the property upon death. If the testator gives the property to the intended beneficiary while the testator is still alive, then the devise is adeemed by satisfaction. Once a devise is adeemed, the beneficiary named in the will takes nothing. Is ademption limited in application to a specific devise (as opposed to a general devise)? - CORRECT ANSWERS Yep. What is "lapse"? - CORRECT ANSWERS When a devise of real property fails because the beneficiary under the will dies before the testator, and no alternate beneficiary is named. If the beneficiary of real property devised in a will dies before the testator, and the testator indicates a clear intent that the devise survive the death of the beneficiary, _____________. - CORRECT ANSWERS The devise will not fail. What is an anti-lapse statute? - CORRECT ANSWERS All states have anti-lapse statutes. They prevent a gift from lapsing if the gift is made to parties specified by the statute, and they leave issue who survive the testator. What happens to a lapsed gift? - CORRECT ANSWERS It becomes part of the residuary estate. When a devise is made to a class (e.g., "my children") and one member of the class dies before the testator, ______________. - CORRECT ANSWERS only the surviving class members take the property. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS If an anti-lapse statute applies because the class members of a class gift were related to the testator, ______________. - CORRECT ANSWERS then the descendants of the predeceased class member also share in the devise Which rule do states apply first, the anti-lapse rule or the class gift rule? - CORRECT ANSWERS The anti-lapse rule. What is the common-law exoneration of liens doctrine? - CORRECT ANSWERS If a testator makes a specific devise of real property that is subject to an encumbrance, such as a mortgage or a lien, then the devisee is entitled to have the land "exonerated" by payment of the encumbrance from the remaining assets in the testator's estate. Do most states follow the common-law exoneration of liens doctrine? - CORRECT ANSWERS Nope, most have abolished it. When states have abolished the common-law exoneration of liens doctrine, what happens to the subject property? - CORRECT ANSWERS It passes subject to the encumbrance unless the will specifically requires payment of the encumbrance. What is a conveyance by trust? - CORRECT ANSWERS A situation in which property is managed by one person or entity for the benefit of another. Who are the parties to a private trust? - CORRECT ANSWERS Settlor - the person who creates the trust Trustee - person who holds legal title to the property Beneficiary - the party who holds equitable title What are the requirements for a valid trust? - CORRECT ANSWERS 1) Intent - the settlor must intend to make a gift in trust 2) Valid purpose - any purpose not illegal or against public policy MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Who is considered the owner of a real property interest in a lien state? - CORRECT ANSWERS The mortgagor (borrower). Who is considered the owner of a real property interest in a title state? - CORRECT ANSWERS The mortgagee (lender). What is a "deed of trust"? - CORRECT ANSWERS An instrument that is used in place of a mortgage. The borrower delivers title to a third-party trustee as security for the payment of the note to the beneficiary (lender), with the condition that the trustee re-conveys the title to the borrower upon payment of the note. In a deed of trust, what happens if the borrower fails to pay the note (defaults)? - CORRECT ANSWERS The beneficiary instructs the trustee to sell the land to repay the note. In a deed of trust, what happens if the property is transferred by the trustee in violation of the trust? - CORRECT ANSWERS An equitable lien may be imposed on the transferred property in favor of the lender. What is the primary reason to use a deed of trust as opposed to a mortgage? - CORRECT ANSWERS While, upon default, a mortgagee-lender who conducts a non-judicial foreclosure sale cannot purchase the property at the sale, a beneficiary-lender of a deed of trust can purchase the property at a similar sale held by the trustee. What is an installment land contract? - CORRECT ANSWERS A contract whereby the seller retains title until the buyer makes the final payment under an installment payment plan. How do states assist a buyer in default with respect to an installment land contract? - CORRECT ANSWERS Some treat it as a mortgage, requiring the seller to foreclose to gain clear title. Other states offer the buyer the equitable right of redemption. Others allow the seller to retain ownership but require some form of restitution to the buyer. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS What is an absolute deed? - CORRECT ANSWERS A deed that is free of all liens and encumbrances and is used to transfer unrestricted title to property. When there is an obligation created prior to or contemporaneously with a transfer by absolute deed, the grantor may prove ________. - CORRECT ANSWERS that the transfer was not actually a sale but instead a disguised mortgage If the issue is proven, a court will treat the transfer as an equitable mortgage. What is the standard of proof for a grantor to prove that an absolute deed is actually an equitable mortgage? - CORRECT ANSWERS Clear and convincing evidence Is parol evidence admissible to prove that an absolute deed was actually a disguised mortgage? - CORRECT ANSWERS Yes, because the deed was not intended to be a complete integration of the parties' agreement. Does the Statute of Frauds prevent the introduction of oral evidence to explain or interpret a written deed? - CORRECT ANSWERS Nope. If a grantor transfers by absolute deed, but that deed was actually intended to be an equitable mortgage, can the grantor recover the property from a BFP? - CORRECT ANSWERS No, but the grantor can seek to recover the difference between the value of the property and the amount of the outstanding obligation. What factors are considered when determining whether a sale-leaseback arrangement is actually a disguised mortgage (i.e. created a security interest)? - CORRECT ANSWERS The equivalency of the lease payments to the fair market rental value and the likelihood that the seller-lessee will exercise his right to repurchase the property as the end of the lease period. Does a mortgagor remain personally liable for the loan upon transfer of the mortgaged property? - CORRECT ANSWERS Yes. If a transferee assumes a mortgage obligation, what is the liability of the mortgagor-transferor? - CORRECT ANSWERS The mortgagor becomes secondarily liable as a surety. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS How can a mortgagor be relieved of personal responsibility for the mortgage obligation? - CORRECT ANSWERS 1) By obtaining release from the lender 2) If the transferee's obligation is modified by the lender 3) If the lender releases or impairs the property subject to the mortgage What is a due-on-sale clause? - CORRECT ANSWERS It provides that, upon the transfer of mortgaged property, the lender has the option to demand immediate payment of the full amount of the outstanding obligation, including interest, unless the lender has given its written permission for the transfer. In exchange for this permission, the lender may increase and interest rate on the loan or demand an "assumption fee." Does a due-on-sale clause cover any type of transfer, including an installment land contract? - CORRECT ANSWERS Yep, typically. What types of property are not subject to federal enforcement of a due-on-sale clause? - CORRECT ANSWERS Residential real property, which includes property containing fewer than five dwelling units. Applies to a variety of transfers. What is a due-on-encumbrance clause? - CORRECT ANSWERS It gives the lender the right to accelerate a mortgage obligation upon the mortgagor's obtaining a second mortgage or otherwise encumbering the property. Do most jurisdictions require an agreement in which a transferee assumes a mortgage obligation to be in writing? - CORRECT ANSWERS No. In what circumstances will a minority of jurisdictions imply an assumption of a mortgage by a transferee? - CORRECT ANSWERS When the transferee-buyer pays the seller the difference between what the house was worth and the outstanding balance on the mortgage obligation. If a transferee-buyer takes title "subject to" an existing mortgage obligation, is the transferee-buyer personally liable upon default? - CORRECT ANSWERS No. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS If there is more than one interest in a property being foreclosed, a valid foreclosure terminates ______, but it has no effect on ______. - CORRECT ANSWERS any interest in the foreclosed property that is junior to the interest being foreclosed any senior interest What are the exceptions to the "first in time, first in right" rule for priority of interests for a piece of real property? - CORRECT ANSWERS Purchase-money mortgage Recording act exception Subordination agreement between mortgages Future-advances mortgage After-acquired property Which interests does a purchase-money mortgage have priority over? - CORRECT ANSWERS Mortgages and liens created by or that arose against the purchaser-mortgagor prior to the purchaser-mortgagor's acquisition of the property. Which has priority: a seller's purchase-money mortgage or a purchase-money mortgage given to a third party (e.g., a lender) by a buyer to aid the buyer in acquiring the property from the seller? - CORRECT ANSWERS The seller's purchase-money mortgage. Does a purchase-money mortgage have priority over an after-acquired property clause in a mortgage of other property granted by the purchaser-mortgagor prior to the P-M's acquisition of the property in question? - CORRECT ANSWERS Yes. A senior mortgagee who enters into an agreement with the mortgagor to modify the mortgage by making it more burdensome subordinates __________. The ____________ otherwise remains superior to the subsequent mortgage. - CORRECT ANSWERS the modified aspect of his interest to a subsequent mortgage that exists at the time of the modification MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS senior mortgagee's interest What is a future-advances mortgage? - CORRECT ANSWERS A mortgage given by a borrower in exchange for the right to receive money from the lender in the future, i.e., a line of credit. Under what circumstances does a future-advances mortgage have priority over amounts loaned before and after the future-advances mortgagee has notice of a subsequent mortgage? - CORRECT ANSWERS When the advances are obligatory, rather than optional The modern trend is to treat a mortgagee as having priority with respect to all future advances, including optional advances, over a subsequent mortgagee. What is required for a mortgagee to have rights to property acquired by the mortgagor in the future? - CORRECT ANSWERS If the mortgage clearly states as much, and to be enforceable against third parties, the mortgagee must record its interest. When properly recorded, does an interest in after-acquired property have priority over a purchase- money mortgage? - CORRECT ANSWERS Nope. Does the purchaser of property at a foreclosure sale take the property free and clear of any junior mortgage? - CORRECT ANSWERS Yes. How are the rights of a holder of a senior interest affect by a foreclosure sale? - CORRECT ANSWERS They usually aren't. If, in a judicial foreclosure, the holder of a junior interest is not given notice of the foreclosure, what happens? - CORRECT ANSWERS The junior interest is not affected by the foreclosure action. If, in a "power of sale" foreclosure, the holder of a junior interest is not given notice of the foreclosure, what happens? - CORRECT ANSWERS The junior interest is destroyed. However, the junior interest holder can challenge the foreclosure on the basis that it did not comply with the statutory procedure for such sales. MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Who chooses which property is foreclosed upon if a mortgage is secured by multiple properties? - CORRECT ANSWERS The creditor, but the holder of a junior interest can petition a court to apply the equitable doctrine of "marshalling of assets." What is the doctrine of "marshalling of assets"? - CORRECT ANSWERS The holder of a senior mortgage may be compelled to first foreclose on the properties for which only that holder possesses a mortgage in order to protect the interest of the holder of a junior interest, so long as it doesn't prejudice the interest of the holder of the senior mortgage or a third party. What is the "inverse order rule"? - CORRECT ANSWERS Applies within the doctrine of "marshalling of assets"--if there are multiple junior interests, then property subject to the more recently created interests is subject to foreclosure prior to property subject to the more remotely created interests How are the proceeds from a foreclosure sale distributed? - CORRECT ANSWERS 1. Costs associated with the sale 2. The mortgage obligation being foreclosed 3. Mortgage obligations owed to junior interest holders in the order of priority 4. Remainder to the debtor-mortgagor Is subrogation permitted when the full obligation secured by the mortgage is not discharged? - CORRECT ANSWERS No, in the case of partial discharge, a payor who is a subordinate mortgagee may be able to add the amount paid to the balance of the subordinate mortgage and recover the amount upon foreclosure. Can a transferee who purchases real property and agrees to assume an existing mortgage able to raise defenses to enforcement, such as statute of limitations, lack of capacity, or failure of consideration? - CORRECT ANSWERS Nope. In general, a mortgagor who becomes a surety with respect to a mortgage obligation upon the transfer of the property to a person who assumes that obligation _____________, such as a lower interest rate or an extension of time to pay. - CORRECT ANSWERS is entitled to the benefit of any favorable modification of the obligation A mortgagor-transferor may raise a modification as a defense to the mortgagee's attempt to enforce the original terms of the mortgage obligation, but _______________. - CORRECT ANSWERS the mortgagor is not entitled to raise defenses that are personal to the transferee MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Under what circumstances can the owner of a servient estate thwart a change to the scope of an express easement? - CORRECT ANSWERS When the change conflicts with the terms of the easement, or if it is unreasonable in light of the purpose of the easement. What is the effect of an attempt to convey an appurtenant easement separate from the land it benefits? - CORRECT ANSWERS It terminates (or severs) the easement. What is required to prove abandonment of an easement? - CORRECT ANSWERS Affirmative acts showing a clear intent to relinquish the easement right. Nonuse is not sufficient. If an easement holder fails to protect his easement against a trespasser for the statutory period, _________. - CORRECT ANSWERS then his easement right may be terminated by prescription Can the owner of a servient estate terminate an easement by estoppel? - CORRECT ANSWERS Yes, if the owner changes position to his detriment in reliance on statements or conduct from the easement holder that the easement is abandoned. Is an easement enforceable against a bona fide purchaser if it was granted but not recorded against the servient estate? - CORRECT ANSWERS Nope. What rights and duties do the holder of an easement have regarding maintenance of the easement? - CORRECT ANSWERS The owner of the easement has the right and duty to maintain the easement for its purpose unless the parties otherwise agree. If the easement is shared, a holder may have to contribute to its upkeep after adequate notice and an opportunity to participate in the repair decision. What is a profit (profit a prendre)? - CORRECT ANSWERS A nonpossessory right to enter another's land to remove specific natural resources (such as oil, gas, minerals, timber, or game). Can a profit be created by necessity? - CORRECT ANSWERS No. Exclusive rights in a profit may be assigned or otherwise transferred and apportioned, as long as the apportionment is not _________. - CORRECT ANSWERS wholly inconsistent with the original agreement MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS Non-exclusive rights can be assignable or otherwise transferred, but apportionment is not permitted ______________. Under the "one stock" rule, the transferees are limited to the amount of material _____________, and this quantity is divided up by transferees taking the profit. - CORRECT ANSWERS when the burden on the servient estate is increased taken by the transferor (i.e., his "stock") What is the difference between a license and an easement? - CORRECT ANSWERS A license is freely revocable unless coupled with an interest or detrimentally relied upon. It may be created without consideration or a writing. What does it mean for a license to be coupled with an interest? - CORRECT ANSWERS One example is when a grantor creates a life estate for A with a remainder to B, and during A's tenancy, B has an irrevocable license to enter the land and inspect for waste. How does a license become converted to an equitable easement? - CORRECT ANSWERS Through detrimental reliance or if the license is coupled with an interest. Is a license revoked when the licensor dies or the servient estate is transferred? - CORRECT ANSWERS Yes. What is the consequence of an attempt to transfer a license? - CORRECT ANSWERS The licensee loses the license. When damages are sought to enforce the covenant, the covenant is called a _______. When an injunction is sought to enforce a covenant, it is called an _________. - CORRECT ANSWERS "real covenant" "equitable servitude" What are the requirements for a real covenant to run with the land? - CORRECT ANSWERS 1) Writing (unless the covenant is an implied reciprocal servitude) 2) Intent MBE FLASHCARDS EXAM QUESTIONS AND ANSWERS LATEST UPDATE 2023/2024 ALL ANSWERS CORRECT VERIFIED BEST GRADED A+ FOR SUCCESS 3) Touch and concern 4) Notice (burden only) 5) Privity What is the modern trend with respect to the touch-and-concern requirement for a covenant to run with the land? - CORRECT ANSWERS The covenant is presumed valid unless it is contrary to public policy, imposes an unreasonable restraint on alienation or trade, or is unconscionable. If it does none of those things, the covenant is valid unless it is illegal or unconstitutional. Under what circumstances does a negative covenant run with the land? - CORRECT ANSWERS If it restricts the owner's use or enjoyment of the land. Under what circumstances does an affirmative covenant run with the land? - CORRECT ANSWERS If they require the owner to do something related to use and enjoyment of the land. Under the modern trend, a covenant to pay money is generally enforceable even though it does not physically affect the land. Is a subsequent purchaser bound by a covenant if the purchaser did not have notice of it? - CORRECT ANSWERS No, if the purchaser is protected by the recording act. Is notice required for a subsequent purchaser to enjoy the benefit of a covenant? - CORRECT ANSWERS No. When is horizontal privity required in order for a covenant to be enforceable in an action at law? - CORRECT ANSWERS For the burden to run, the original parties must have privity of estate at the time the agreement creating the covenant is entered into (some shared property interest apart from the covenant itself). How does the vertical-privity requirement operate for real covenants? - CORRECT ANSWERS The burden of the covenant runs if the successor holds an estate of the same duration as the original