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WorksheetsLaw of Contracts Final Exam Part 1
Total questions: 50
Worksheet time: 25mins
Brianna is selling her home to downsize and live closer to her grandchildren. She has been looking at a property to buy, and while the sellers are eager to close the sale, Brianna has made it clear she won't buy until her current property is sold. This is an example of a(n):
sale of another property contingency
appraisal contingency
financing contingency
inspection contingency
What is typically added to a contract before it's signed and specifies supplementary information not previously included in the contract?
addenda
codicils
affidavits
amendments
Natalea has one of her listings under contract. The contract calls for possession at closing. Now the seller asks if she can stay for three days after closing. The buyer orally agrees. What does Natalea need to do now?
prepare an amendment and add the Seller’s Temporary Lease Agreement
change the terms in the original document under special provisions
When a lender agrees to allow the borrower to sell the property and accept less than a full pay off amount, it is referred to as a(n):
short sale
alternative payoff
hardship payoff
short payoff
All of the following legislation was designed to protect consumers from unfair lending practices EXCEPT:
Americans with Disabilities Act
Equal Credit Opportunity Act
Truth in Lending Act
Real Estate Settlement Procedures Act
What happens when the property and the buyer have both met the lender’s underwriting requirements?
The loan is approved.
The underwriting process begins.
The buyer is pre-qualified.
Which of the following is the promise to pay on a mortgage loan?
promissory note
deed of trust
lien
mortgage
Which of the following documents are considered proof of ownership?
the deed
the title policy
Although it is NOT a physical document, the actual ownership of a property is signified by who holds the:
title
deed
deed of trust
notice
Jack died without a will. His property is disposed of through the laws of descent. That is considered:
involuntary alienation
adverse possession
eminent domain
voluntary alienation
Loan approval consists of two different approvals. What are they?
approval of the buyer and approval of the property
approval of the appraisal and approval of the seller
approval of the survey and approval of the buyer
What, if anything, must happen when an inspector reports a problem?
No one is technically required to repair the problem.
The seller must repair the problem.
Examples of ongoing expenses that need to be split fairly between the buyer and seller of the property through prorations include all of the following EXCEPT:
homeowners insurance
HOA dues
real estate taxes
utility charges
The effective date is determined by:
the final date of acceptance
when the seller accepts an offer
when the first draft of the contract is given to clients
when the contract is put into writing
Which of the following is NOT a good contract practice?
Advise sellers that they must accept the offer that is received first.
Always fill in the contact information accurately.
Get the final contract in writing.
Set closing 30-45 days out
According to TREC, how many days do buyers have to deliver their termination-option fee?
three calendar days
three business days
The statute of frauds stipulates that:
All contracts that involve the sale or transfer of real estate, debts, specific obligations, and the sale of goods (exceeding $500) must be in writing.
All contracts that cannot be completed within six months must be in writing.
A legal description MUST:
describe a property in a precise and distinct manner
match the address on record at the post office
A leasing of bare, undeveloped land
Variable Lease
Index Lease
Ground Lease
Graduated Lease
The process and act of transferring property from one party to another
Alienation
Severance
Escheat
Forbearance
All of the following are contracts promulgated by TREC EXCEPT:
Lease to Purchase Contract
Farm and Ranch Contract
Unimproved Property Contract
One to Four Family Residential Contract
A breach of the lease occurs when a tenant refuses to vacate the property upon the expiration of the lease. When a tenant will not vacate, the lease becomes a(n):
tenancy at sufferance
illegal occupation
suffrage operation
illegal tenancy
Which of the following is NOT a valid reason for a party to discharge a contract?
liquidated damages
partial performance
mutual agreement
operation of law
In Texas, if a lease gives the tenant the option to purchase the property at the end of the lease term, what kind of contract is that?
executory
execution
expired
executed
When is the buyer entitled to receive the Seller’s Disclosure Notice and all information about the condition of the property?
before making an offer
before closing
after closing
within three days of the acceptance of the offer
Reese is the listing agent for a house that has had its foundation repaired. Reese believes that information could harm his seller, so Reese does not tell potential buyers about it. Reese advised the seller not to mention it on his seller’s disclosure. Is Reese in danger of ending up in court?
Yes, he could be sued under DTPA.
No, Frank is taking care of his seller.
To be enforceable, the statute of frauds requires all real estate contracts:
be in writing
be closed within one year
be filed at the country clerks office
pass through the three essential stages
In order for a loan to be approved, the lender must approve both the buyer and the:
property
seller
financing
loan origination
Which type of co-ownership for married couples dictates that each spouse has half ownership of any property obtained during the marriage, and cannot be sold without the signatures of both spouses?
community property
in severalty
tenancy in common
joint tenancy
Kailey is leasing an apartment. She just purchased a ceiling fan for her apartment. While the ceiling fan is still in the box, the ceiling fan is:
personal property
land
easement
real estate
Which of the following laws affecting real estate prohibits discrimination in housing based upon race, color, religion, or national origin?
the Fair Housing Act
the Deceptive Trade Practices Act
the Texas Real Estate License Act
the Uniform Commercial Code
TREC approves and promulgates many forms for license holders' use. These include:
sales contracts and addenda
property management agreements
contracts, property management agreements, and listing agreements
listing agreements and leases
What is the primary purpose of the Broker-Lawyer Committee?
to create, edit, and recommend contract forms to TREC
to create and codify real estate rules for TREC
A seller's property has flooded three times in the past year. When he sells it, he tells his agent but does not disclose the flooding to the buyer. The buyer asks if the creek nearby has ever flooded, and the agent said not that he was aware of. What Act could the agent be guilty of violating?
DTPA
RESPA
TREC
ECOA
A broker is helping a government agency locate a building they can buy for an office. The agency has its own form they want the agent to use when they make their offer. Can the agent do that legally?
Yes, a government agency can require their own form to be used.
No, it would be a violation of TRELA.
No, it is a violation of the Rules of the Commission
No, they must use the promulgated form.
Which of the following is NOT an essential element of a valid contract?
EARNEST MONEY
CONSIDERATION
LAWFUL OBJECTIVE
LEGALLY COMPETENT PARTIES
A contract is signed by a minor. The contract is:
voidable
void
unenforceable
valid
When the terms of a contract have not been completely executed or performed, it is considered to be what kind of contract?
executory
bilateral
unilateral
executed
The Environmental Protection Agency requires sellers of houses built before 1978 to furnish buyers with a:
Lead-Based Paint Disclosure Form
Mold Disclosure Form
Radon Discovery Form
Kali owns her house. She has full ownership rights to her property, could sell it whenever she wants, and can pass the property on to her heirs. What kind of estate does Kali have?
fee simple absolute estate
fee simple determinable estate
leasehold estate
Grace shares a driveway with her neighbor Elizabeth. The driveway is on Grace's property, but Grace allows her neighbor to use the driveway. What is this an example of?
an easement
an encroachment
The effective date is determined by:
the final date of acceptance
when the seller accepts an offer
when the first draft of the contract is given to clients
when the contract is put into writing
Which of the following is NOT a good contract practice?
Advise sellers that they must accept the offer that is received first.
Get the final contract in writing.
Always fill in the contact information accurately.
Set closing dates in the 45- to 60-day range.
A sale contract must include the minimum requirements for a valid contract as well as:
a legal property description
an income statement
an appraisal
a comparative market analysis
The government of Pleasantville is seizing land in order to widen several major streets in the city. They take the land without the property owners' consent. This is an example of:
eminent domain
foreclosure
escheat
accession
Emma is taking out a VA loan. She will NOT be permitted to pay:
escrow fees
taxes
recording fees
attorney fees
In Texas, a contract for deed, land sales contract, lease with option to buy, and lease purchase are all considered:
executory contracts
contracts for deed
executed contract
If a homeowner sells his home, he is said to be separated from his home via:
voluntary alienation
involuntary alienation
eminent domain
adverse possession
The leasing of bare, undeveloped land is carried out through a(n):
ground lease
net lease
oil and gas lease
percentage lease
What are addenda?
additional forms that need to be added to a contract in order to cover special circumstances related to the sale
agreements in which both parties give consideration and promise to perform the actions specified in a contract
contracts in which only one of the contracting parties is bound to act
agreements in which both parties have fulfilled their promises
