Exam (elaborations)
PROMULGATED CONTRACTS QUESTIONS AND ANSWERS
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PROMULGATED CONTRACTS QUESTIONS AND ANSWERS
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PROMULGATEDCONTRACTS
QUESTIONS AND
ANSWERS
Contract: - Answers-A legally binding and enforceable agreement to do or not to do a
specific thing
Promulgated Contract: - Answers-A contract that has been approved and is required to
be used by license holders
In Texas, what are the two entities that promulgate contracts? - Answers-TREC and
TAR
In a real estate sale, the license holder must use the appropriate TREC-promulgated
form UNLESS another contract form is required by the buyer's lender. - Answers-FALSE
(Explanation: In a real estate sale, the license holder must use the appropriate TREC -
promulgated form UNLESS another contract form is required by the property owner.
The buyer's lender has no influence over the sales contracts used in a transaction.)
Valid Contract: - Answers-Legal agreement meeting all the essential, basic
requirements of the law
Unenforceable Contract: - Answers-A contract that cannot be enforced by the courts
5 essential elements of a valid contract: - Answers-1.Mutual assent (100% agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
,If two people have a contract for one to sell illegal drugs to the other, the contract would
be: - Answers-Void
A contract that cannot be enforced by the courts is _____. - Answers-unenforceable
Executory Contract: - Answers-A contract that is not completely executed or performed
Executed Contract: - Answers-A contract in which all terms have been fulfilled by all
parties
A contract that is "pending" is __________________. - Answers-executory
The difference between an executory contract and an executed contract is that the
executed contract is _____. - Answers-closed
The best way for any contract to terminate is to become _________________. -
Answers-executed
According to Texas state law, a contract for deed and a lease with an option to buy are
considered ___________. - Answers-executory contracts
Bilateral Contract: - Answers-A contract in which one party must promise to do
something for another party and that party must promise to do something for the first
party
Unilateral Contract: - Answers-A contract made between two or more parties in which
only one of those parties makes a promise or otherwise accepts an obligation
An option to buy contract is a(n)_________________. - Answers-Unilateral Contract
Which of the following is a bilateral contract? - Answers-leases
If a contract says "time is of the essence," that means that it is due: - Answers-as soon
as possible
By whom should the language "time of the essence" be added? - Answers-an attorney
Addenda: - Answers-Materials added to and included in the initial contract that provide
more information on the transaction
Amendment: - Answers-Items that are attached to the original document and should
never be changed after the document has been signed and accepted
A license holder should ___________. - Answers-disclose all material facts to the client
, Legally Competent: - Answers-When an individual has reached the age of majority (18
years of age) and has not been declared mentally incompetent by a judge
Void Contract: - Answers-A contract that has no legal effect
Voidable Contract: - Answers-When one or more of the parties has the authority to
rescind the contract
Consideration: - Answers-A valuable item that each party exchanges in order to
demonstrate that they agree to the contract terms
Which of the following is TRUE of mutual agreement? - Answers-There cannot be
mistakes in the terms and conditions
All of the following are essential elements of a valid contract EXCEPT: - Answers-
earnest money
What is NOT an element of a valid contract? - Answers-earnest money
A law that requires real estate contracts to be in writing is the ______. - Answers-statute
of Frauds
When filling out the nine checkable box options on the Amendment to Contract form,
more than one box can be checked. - Answers-TRUE
In which situation would an amendment go into effect? - Answers-the parties sign to
amendment
TREC promulgated addenda are added to the contract AFTER it has been signed. -
Answers-FALSE
(Explanation: Addenda are added to the contract BEFORE the contract has been
signed. Amendments are added afterwards.)
Performance: - Answers-The responsibility of all the parties to carry out their part of a
contract
Quitclaim Deed: - Answers-Transfers ownership of whatever the grantor owns but make
no guarantee of ownership and no promise to defend
Novation: - Answers-The substitution of a new contract for an existing contract, relieves
the original party of liability
Obligations often times must be completed within a certain number of days of _____. -
Answers-the effective date
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