Texas Promulgated Contract Forms Study

Texas Promulgated Contract Forms Study Guide Exam with Complete Solution

• What determines whether someone is a competent party?

{{Correct Ans- At least 18 years of age

Mentally competent

Cannot be temporary incompetent

• What is the minimum age a person must have attained to be of legal age in Texas?

{{Correct Ans- 18

• To make a valid contract, there must be four elements including Agreement, Competent Parties

and Legal objective. Which one is missing? {{Correct Ans- Consideration

• What are the four basic elements of a contract?

{{Correct Ans- Agreement

Competency

Consideration

Legal Objective

• What group administers the Texas Real Estate License Act?

{{Correct Ans- Texas Real Estate Commission

TREC

• What is misrepresentation? {{Correct Ans- An error

• What is a court's primary objective when interpreting a contract?

{{Correct Ans- To ascertain and give effect to the intent of the parties

• What is duress? {{Correct Ans- Use of force

• What is it called when all terms in a contract are agreed to by all parties of the contract?

{{Correct Ans- Mutual Agreement

• Consideration is also known as what? {{Correct Ans- Something in exchange for something else

• What is it called when someone listens to both sides of the situation and makes a decision?

{{Correct Ans- Arbitration

• Who is responsible for making sure all applicable addenda have been included with the contract?

{{Correct Ans- You are, the clients agent

• What legal status does a void contract have {{Correct Ans- A contract that never existed

• Fraud in a contract makes it what? {{Correct Ans- Voidable

• What type of contract is it when two parties agree to and then sign it? {{Correct Ans- Executed

• What is the definition of an executory contract?

{{Correct Ans- Contract for deed lease option purchase option longer than 180 days

• Who fills out the Seller's Disclosure Notice? {{Correct Ans- The seller

• What is the best solution to solve a situation when the seller and buyer agree to alter a binding

One to Four Family Residential Contract (Resale)?{{Correct Ans- The amendment must be completed and signed by both parties

• How can an agent determine the terms of the buyer's loan when completing the Third Party

Financing Addendum?{{Correct Ans- The lender will provide this information after negotiations with the buyer

• Alicia is set to close on her new home in three days, but today she received a phone call from her

agent stating that the lender needs to push closing back seven days. What, if any, action needs to be done?

{{Correct Ans- Alicia's agent should submit an "Amendment to Contract" with the new closing date to the seller's agent.

• In completing a sales contract, the sale price should equal what?

{{Correct Ans- Both the down payment and the loan amount are added together

• What form is used when the buyer wants to cancel the contract?

{{Correct Ans- Buyer's termination of contract

• Which item cannot be changed or modified by completing the Amendment form?

{{Correct Ans- Brokerage fee (commission)

• What does the Four Corners Doctrine direct a judge to look at? {{Correct Ans- Document as a

whole

• If a party feels they have been wronged, what law sets the length of time they are allowed to

bring a civil lawsuit? {{Correct Ans- Statute of Limitations

• How long is the Statute of Limitations for a written contract in Texas? {{Correct Ans- Four years

• How long is the Statute of Limitations for an oral contract in Texas? {{Correct Ans- Four years

• What are some examples of discharging a contract?

{{Correct Ans- Contract could not be accomplished legally, fraud or some action of the law.

• How difficult was the real estate license to acquire prior to the 1930's?

a There were only 50 questions and all were true/false

b The same test as today, with updates

c The test was based on practical experience, not questions.

d There was no test {{Correct Ans- d there was no test

• What type of contract dispute results in going to court and usually involves attorneys and

research?

a Litigation

b Mediation

c Arbitration

d Sublimation {{Correct Ans- a Litigation

• What was the Texas Real Estate License Act called in 1939?

a The Real Estate Dealer's License Act

b The Broker's Act of 1939

c The Real Estate Settlement Procedures Act

d The Real Estate Investment Act {{Correct Ans- a The Real Estate Dealer's License Act

• What is the legal age in Texas to enter into a valid, binding contract?

a 17

b 18

c 21

d Any age {{Correct Ans- b 18

• What damages could a seller possibly claim if the buyer is in breach of contract?

a Loss of Marketing time

b Any fees actually paid

c Mental Duress

d All of the above {{Correct Ans- d All of the above

• How many amendments are allowed on a valid contract?

a No more than two without a rewrite

b Only one

c Multiple

d Amendments are not allowed after 10 days after acceptance {{Correct Ans- c Multiple

• Which of these forms is a Texas Real Estate Commission (TREC) promulgated form?

a Broker-agent employment contract

b New Home Contract (Completed Construction)

c Listing Agreement

d Information About Brokerage Services {{Correct Ans- b New Home Contract (Completed Construction)

• What repairs might be noted on the Texas Real Estate Commission Amendment to Contract?

a Swimming pool has missing tiles that are to be replaced