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Unit 1 Texas Contract Law Questions and Answers
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Unit 1 Texas Contract Law Questions and Answers
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Unit 1: Texas Contract Law Questionsand Answers
A real estate broker, acting only as a principal to a transaction (i.e., as a buyer or seller),
- Correct Answers -is exempt from mandatory use of a TREC-promulgated form.
Which of the following is an exception to using TREC-promulgated contract forms? -
Correct Answers -When the licensee is acting as a principal and not as an agent
Who appoints the TREC commissioners? - Correct Answers -governor
Which of the following addenda are promulgated by TREC? - Correct Answers -All of
these
Which of the following is a TREC-promulgated form? - Correct Answers -Addendum for
Sale of Other Property by Buyer
A licensee representing a seller is asked by that seller, "What does paragraph 5 of this
TREC-promulgated contract mean to me?" What is the best answer by that agent? -
Correct Answers -"I'm not an attorney, but here is what it means..
What is the primary difference between a lawsuit brought under the Deceptive Trade
Practices Act (DTPA) and any other type of civil action? - Correct Answers -Treble
damages are available under the DTPA.
What is the term for a TREC commissioner? - Correct Answers -staggered six-year
terms
Why would a seller want to fill out a seller's disclosure notice? - Correct Answers -all of
these
One co-owner conveys interest to another co-owner. What does Section 5.008 of the
Texas Property Code say about this situation? - Correct Answers -It does not require
the selling co-owner to provide a written notice of the property's condition.
,According to the Texas Real Estate License Act, which of the following requires that a
licensee be a practicing attorney? - Correct Answers -Advising a person regarding the
validity of title to real property
What type of committee is the Broker-Lawyer Committee? - Correct Answers -Advisory
A man dies and his property transfers to his heirs through probate. Who is required to
provide the seller's disclosure notice? - Correct Answers -no one
What is the make-up of the Broker-Lawyer Committee? - Correct Answers -Six brokers,
six lawyers, and one member of the general public
How many promulgated contracts does TREC issue? - Correct Answers -six
What must a plaintiff prove about a misleading statement in order to get triple damages
under the DTPA? - Correct Answers -That the defendant acted knowingly
An owner of a property is selling the land to another. The land has a house on it, but the
house is insignificant to the buyer. Which of the following is TRUE? - Correct Answers -
The seller's disclosure notice is required unless the value of any dwelling does not
exceed 5% of the value of the property.
Which of the following groups of real estate professionals subscribes to a code of
ethics? - Correct Answers -National Association of REALTORS
Who promulgates contracts for mandatory use by licensees? - Correct Answers -Texas
Real Estate Commission
A seller under a standard purchase agreement promulgated by the Texas Real Estate
Commission (TREC) did not provide a seller's disclosure notice when required by the
Texas Property Code (TPC). The buyer - Correct Answers -could terminate the contract
Which of the following should a listing agent NOT do in relation to the seller's disclosure
notice? - Correct Answers -be accessible when the seller is filling out the notice to help
answer questions and aid the seller in filling it out
What is the possible result for an owner not providing a seller's disclosure notice when
required by the Texas Property Code (TPC), according to the standard purchase
agreement promulgated by the Texas Real Estate Commission (TREC)? - Correct
Answers -The seller would be in violation of failing to disclose, and the buyer could
terminate the contract.
When should a buyer review the written seller's disclosure notice? - Correct Answers -
prior to writing an offer
, A licensee is NOT required to disclose in a written seller's disclosure notice - Correct
Answers -that the seller's son had AIDS and died.
As compared to any other type of civil action, in a Deceptive Trade Practices Act
(DTPA) action, a plaintiff - Correct Answers -may be awarded treble damages
If a buyer receives TREC OP-H, and the Seller's Disclosure of Property Condition after
the sales contract has been signed by all parties, how many days does the buyer have
to terminate the contract? - Correct Answers -7 days
If an agent is preparing an offer for a buyer but has not been able to get a completed
seller's disclosure from the listing agent, the buyer - Correct Answers -can make an
offer and ask the seller to provide the notice within a certain number of days.
What effect do the rules made by the commission have on licensees? - Correct
Answers -The rules have full force and effect of law.
For which of the following actions may the Texas Real Estate Commission NOT
suspend a licensee's licensee? - Correct Answers -The licensee explains to the
principals the meaning of the factual statements or business details contained in the
contracts.
Which of the following is NOT a TREC-promulgated addendum? - Correct Answers -
Addendum for Seller's Right to Terminate
Which of the following is NOT required to provide a written seller's disclosure notice? -
Correct Answers -A beneficiary under a deed of trust who has acquired the real property
at a sale conducted pursuant to a power of sale
Which of the following real estate-related entities has rule-making authority in the state
of Texas? - Correct Answers -the commission
An agent represents a buyer. Which of the following forms of advice can the agent give
to an unrepresented buyer? - Correct Answers -Advice on having the abstract examined
by an attorney
Which of the following forms is approved by TREC for a written seller's disclosure
notice? - Correct Answers -OP-H
Which of these is a consumer protection act that protects the public from false and
misleading acts? - Correct Answers -Deceptive Trade Practices Act
Real estate brokers who are members of the Broker-Lawyer Committee become
members by being - Correct Answers -appointed by the TREC
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