11- Contracts

Question 0

In which circumstance is a broker’s commission subject to forfeiture?

Answer 0

The broker violates a fiduciary duty

Question 1

Which of the following is an example of a unilateral contract?

Answer 1

Open listing contract

Question 2

If an owner revokes an exclusive right of sale listing and sells the property during the remaining time the listing would have been in effect, what is the broker entitled to?

Answer 2

A full commission

Question 3

Which of the following terms refers to a type of contract were all terms and conditions are not fully expressed?

Answer 3

Implied

Question 4

What are the required elements of all valid contract?

Answer 4

Legal subject, agreement, consideration, and two or more competent parties

Question 5

The phrase “meeting of minds” refers to which of the following?

Answer 5

Offer and acceptance

Question 6

Which of the following best describes a contract?

Answer 6

Legally binding

Question 7

What is the term used to describe the party who receives an offer?

Answer 7

Offeree

Question 8

Which of the following terms best describes a contract in which all the terms and conditions have been fully performed?

Answer 8

Executed

Question 9

Which statute requires a purchase and sale contract to be in writing to be enforceable?

Answer 9

Statute of frauds

Question 10

What is the term used to describe the consideration given by a buyer to indicate serious intent to buy a property?

Answer 10

An earnest money deposit

Question 11

Which of the following does not terminate an offer?

Answer 11

A failure to obtain a binder deposit

Question 12

Which of the following establishes the time period for enforcement of a contract?

Answer 12

Statute of limitations

Question 13

A buyer negotiates a contract to purchase property, take possession and pays the property purchase price in installments, but does not receive the legal title until the full purchase price has been paid. What is this agreement called?

Answer 13

An installment contract, contract for deed, or land contract

Question 14

Which document is a real estate broker not legally allowed to prepare?

Answer 14

Lease

Question 15

Which contract gives a buyer the right to purchase for a specified time at a specified price?

Answer 15

Option contract

Question 16

What is the legal term that is used to designate the transfer of rights from one party to another?

Answer 16

Assignment

Question 17

When the court determines that a contract existed due to the actions of the parties, the contract is referred to as:

Answer 17

An implied contract

Question 18

In order for a valid and enforceable real estate sales contract to partake what is an essential element:

Answer 18

Offer and acceptance must be communicated by each party to the other

Question 19

What statute specifies the time limits for enforcement of contracts?

Answer 19

Statute of limitations

Question 20

A seller wishes to net $140,000 for the sale of a property. Closing costs are estimated to be $3,600, and the broker will receive a 7% commission. Calculate the sales price required to pay the expenses and meet the seller’s net requirement.

Answer 20

$140,000 + $3,600 = $143,600

100-7 = 93

$143,600 / 0.93% = $154,409

Question 21

A buyer and seller have entered into a purchase and sales agreement. The buyer chooses not to close, and defaults on the agreement. The seller claims the escrow deposit. The escrow deposit will likely be considered:

Answer 21

Liquidated damages to the seller

Question 22

Which of the following is correct regarding the “as is” provision in a sales contract?

Answer 22

The seller is still required to disclose all known defects that may materially affect the value of the property

Question 23

A buyer and seller have agreed to terms and entered into a purchase and sales agreement. The buyer loses their job, and decides not to close on the property. The seller claims the escrow deposit in this case, the escrow deposit is considered:

Answer 23

Liquidated damages

Question 24

Which of the following statements is correct regarding the statute of frauds?

Answer 24

It requires certain contracts to be in written form to be enforceable in court

Question 25

An option contract is a unilateral contract, binding upon the:

Answer 25

Optionor

Question 26

Which of the following would be a valid remedy for breach of a purchase and sales contract?

Answer 26

Sue for damages

Question 27

Offers may be terminated by all of the following except:

Answer 27

Breach

Remember: WILDCARD

Question 28

Which of the following list of actions contain ways that a contract will be terminated?

Answer 28

Breach, performance, or lapse of time