Chapter 1 ( if you want to learn more in details)

Question 1

REDLA act 1939 was administered by

Answer 1

Secretary of state

Question 2

Why TRELA was created ?

Answer 2

TRELA was created to protect the public from dishonest brokers and sales agents by establishing rules for obtaining and maintaining a real estate license.

Question 3

Regulation of Third Party

Answer 3

Any salesperson is considered a third party and regulated by TREC.Sellers are the party of the first part, and buyers are the party of the second part

Question 4

Forbearance Vs performance in contract

Answer 4

Doing something is known as performance. Refraining from doing is known as forbearance.

Question 5

pacta sunt servanda

Answer 5

agreements are to be kept

Question 6

Legal Age

Answer 6

To be of legal age in Texas, a person must be 18 or more years old, unless they are in the military or married. Adult status is not lost if a divorce takes place before reaching the age of 18. Minors may also be emancipated by the courts.

Question 7

What group administers the Texas Real Estate License Act?

Answer 7

Texas Real Estate Commission

Question 8

Court’s primary objective when interpreting a contract

Answer 8

to ascertain and give effect to the intent of the parties as it is expressed in the contract.

Question 9

What is acceptance?

Answer 9

Acceptance must be absolute and must be entered into freely and voluntarily. The contract cannot contain:

Misrepresentation – an error
Fraud – intentional misrepresentation
Duress – use of force
Menace – threat of violence
Undue Influence – use of power

Question 10

Limitations on Consideration

Answer 10

1. Consideration must not be from the past.
2. “A promise must not be to do something one is already obligated by the general law to do. For example, to not commit a crime or to give evidence in court.”

Question 11

Arbitration

Answer 11

an arbitrator listens to both sides of the situation and makes a decision. In arbitration, the decision of the arbitrator is binding on both parties, and court action cannot be pursued.

Question 12

Mediator Career

Answer 12

1. 40 classroom hours of approved training in dispute resolution techniques
2. For parent-child disputes, an additional 24 hours training in the fields of family dynamics, child development, and family law

(The Texas Mediator Credentialing Committee, a coalition of Texas mediator organizations, has a voluntary credentialing program.)

Question 13

Arbitrator Career

Answer 13

An arbitrator must have a law degree or a master’s degree in law, public policy or a related field.

The arbitrator should know dispute-resolution methods and have writing and listening skills in their education

Question 14

Definite and Certain means ?

Answer 14

The terms must be stated in a way that a reasonable person could understand them.

Question 15

Void translates as

Answer 15

“absence of”, meaning the contract never existed.

Question 16

What make the contract voidable ?

Answer 16

-Dishonesty, malice
-one party can change his mind and exit the contract.in the -case of an incompetent party, a court may make the decision for the individual
-Coercion, threats, false statements, undue influence, misrepresentation, improper persuasion and fraud could be reasons to make a contract voidable by the party who feels they were the victim of unfairness.

Question 17

Void Vs Voidable

Answer 17

The fundamental difference between these two types of contracts is that a void contract is not legally valid or enforceable at any point. A voidable contract can be legal and enforceable depending on how the contract is used.

Question 18

Unenforceable Contracts

Answer 18

A contract can be said to be unenforceable when it goes against the Statutes of Fraud.This means that one party may be in default, but because of the nature of the agreement, the damaged party would not have the ability to sue the other party in court.

A common example is an oral agreement between a broker and a seller.

Question 19

Texas Property Code as an executory contract.

Answer 19

contract for deed, lease option, or purchase option longer than 180 days .
(executory contract, the buyer has the right, but not the obligation, to complete the purchase.)

Question 20

Rules for Executory Contracts ( not important )

Answer 20

The rules governing executory contracts for the purchase of residential property and lots measuring one acre or less are primarily found in Subchapter D.

2.rules discussed in this article on the Texas Property Code by attorney Drew Shirley, do not apply to executory contracts that provide for the delivery of a deed from the seller to the buyer within 180 days.

Question 21

Unilateral contracts

Answer 21

1. An open listing agreement is a unilateral contract
   2 .lease to own
   (always better if referred to a real estate attorney to draft such an agreement.)

Question 22

Reasonable Time

Answer 22

It is the period determined from trade practice, custom, or from circumstances./ the courts will determine a reasonable time for such performance.

(Reasonableness, or unreasonableness, of time can only truly be determined by a court of law.)

( Texas Real Estate Commission believes the contract should use the phrase “reasonable time”, not “time is of the essence.)

Question 23

**Seller Obligation at closing

Answer 23

1. DELIVER THE DEED
2. Abstract of title, or a title insurance policy.
3. Copy of the release of lien if the seller had one on the property, and stating that it will be paid off during the closing.
   4.Documents necessary to make the title valid when passing ownership to the buyer.

Question 24

Survey at closing

Answer 24

be obtained by either the buyer or the seller in order to meet the requirements of the lending institution.

Question 25

Fraud in a contract makes it what?

Answer 25

Voidable

Question 26

Contract Addenda ( important )

Answer 26

any time an addendum is attached to an earnest money contract, the box referencing that addendum should be checked in the agreement of parties paragraph of One to Four Family Residential Contract (Resale). If the addendum is not on the list, then it should be written into the line that says "Other" and that box should be checked.

Question 27

One item that cannot be changed by using an amendment

Answer 27

is the brokerage fee, also called a commission. The brokerage fee should already have been determined in the listing agreement between the seller and the listing broker.

Question 28

CHANGE vs amendments

Answer 28

If a contract is modified before it is signed, such changes are not "amendments.". These modifications are sometimes referred to as amendments, but they are not technically so.

Question 29

Paragraph 3 , Amendment (original closing date needs to be changed)

Answer 29

1.Buyer cannot get out of his lease 2.seller needs more time to find another home 3.repairs requested in paragraph (2) of the amendment will take a period of time. 4.When the lender is missing information for final loan approval.

Question 30

Paragraph 5

Answer 30

1. VA or FHA loan being used in a transaction. Condition of the property > 2. Example : Leaky roof Damaged garage doors Flaking exterior paint Broken pipes (the total amounts for each party should be written in paragraph (5) with an itemized list attached.)

Question 31

Notice of Buyer’s Termination of Contract.

Answer 31

Addendum should be used by the buyer to cancel the contract

Question 32

Four Corners Doctrine

Answer 32

When there is a dispute in a written contract the judge will use what is called the Four Corners Doctrine. This means that the interpretation of any disputed clause will be influenced by the document as a whole.

Question 33

Parol Evidence

Answer 33

a common-law rule / Parole evidence prevents a party to a written contract from presenting oral evidence that contradicts, or adds to, the written terms of the contract that appears to be whole.

Question 34

statute of limitations for injury to personal property

Answer 34

2 years

Question 35

Seller's termination in the contract => which form

Answer 35

Texas REALTORS® Release of Earnest Money form

Question 36

Discharge

Answer 36

Discharge means to release, liberate, annul, or unburden. Fraud committed by either party in the contract could discharge the contract. contract can be discharged is by some action of the law.