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1251 Law of Contracts Questions with correct Answers
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1251 Law of Contracts
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1251 Law of ContractsWhich of the following practices could be considered practicing law by a real estate
broker for the sale or lease of real property?
A. Use of a form prepared by the broker's company
B. Use of a form prepared by an attorney
C. Use of a form prepared by the property owner
D. Use of a form promulgated by TREC - answerUse of a form prepared by the broker's
company
When a seller and a buyer wish to convey personal property, this is done with -
answerA bill of sale
When an offer becomes a contract, which step is NOT required?
A. Signatures of buyer and seller are required.
B. Both agents must meet to review the contract.
C. Notice must be delivered to all parties.
D. All changes to offer must be initialed - answerBoth agents must meet to review the
contract
(If the agents meet, it should be prior to the presentation of the offer. This will give the
buyer's agent the chance to present his offer, present his buyers, and explain any
unusual or out of the ordinary requests in the contract)
To finalize the contract, it must be - answerinitialed and signed by both parties and
delivered to all parties.
An act or practice which, to a consumer's detriment, takes advantage of the lack of
knowledge, ability, experience, or capacity to a grossly unfair degree is called a(n) -
answerUnconscionable action
Who does the Texas Real Estate Commission protect? - answerConsumers
Listing contracts must include the verbiage that "commissions are negotiable."(T/F) -
answerTrue
There is no "set" or "standard" commission fee in real estate. If commissions are fixed,
this violates the Sherman Anti-Trust Act. (T/F) - answerTrue
Are licensed real estate agents legally authorized to draft a document that affects the
interest in a property? - answerNo
, Paragraph 23 of the contract is called the Option paragraph. In essence, this paragraph
gives the buyer the unrestricted right to terminate the contract for any reason within a
certain time frame (T/F) - answerTrue.
(Usually, this time frame is seven or ten days)
Law handed down by the legislature - answerStatutory law
The land and all structures man-made - answerReal estate
Situs - answerLocation of the property
Which business organizations can own property and transact business in its name? -
answerAssociations
A form of ownership where the owner receives shares - answerCooperativres
The Real Estate License Act came out of a law passed by the Texas Legislature in 1965
(T/F) - answerFalse
(The law was passed in 1939.)
The Joint Broker-Lawyer Committee drafts and revises the contracts used by real estate
agents in Texas(T/F) - answerTrue
. "Land" is composed of three parts. Which one is NOT one of these parts?
A. Surface
B. Man-made structures
C. Subsurface
D. Air space - answerMan-made structures
What are a property owner's rights?
"The bundle of rights" - answerRight to control
The right of exclusion
The right of enjoyment
Minors, those who are mentally infirm, and those under the influence are not considered
competent parties. (T/F) - answerTrue
Must contracts have monetary consideration? - answerNo
A valid contract: - answerIs enforceable in a court of law
Acceptance of a contract must be made without duress, undue influence, or
misrepresentation. (T/F) - answerTrue
Voidable contract - answerA formal agreement between two parties that may be
rendered unenforceable for a number of legal reasons
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