Deck 6: Contract Law

Question 1

The buyer agreed to buy the property at the seller's asking price. They shook hands on the deal. Later, the seller refused to sell. If the buyer still wants to buy, he can

A) hire an attorney and sue for non-performance.
B) go to a small claims court and sue for damages.
C) consult a real estate broker and ask her to explain that the seller must honor the agreement.
D) do nothing.

Answer 1

A
If the buyer still wants to buy, he can sue for non-performance.

Question 2

All of the following are real estate contracts EXCEPT

A) an exclusive right to sell listing.
B) a sales agreement.
C) a closing statement.
D) a lease.

Answer 2

C
This is not a contract.

Question 3

When a contract appears to be good and binding but, in fact, one of the parties may legally reject it, the contract is said to be

A) unenforceable.
B) valid.
C) void.
D) voidable.

Answer 3

D
This contract would be considered voidable.

Question 4

The agency relationship of a real estate broker with his client is most often established by

A) an implied contract.
B) express contract.
C) an endorsement.
D) a ratification.

Question 5

The broker has the power to sign documents for the principal. This is probably because she holds

A) a power of attorney.
B) an agency relationship.
C) special agent status.
D) an attorney-at-law.

Question 6

John and Jay are brothers who received title to a property from their father. When they decided to sell the property, Jay was out of town. In order to properly transfer title, the deed could be signed by

A) John alone, since they are brothers.
B) John, with a properly recorded power of attorney from Jay.
C) John and the father, since the father was the original owner.
D) no one, since both must be present.

Question 7

A contract entered into by a minor is

A) illegal.
B) voidable.
C) valid.
D) unenforceable.

Question 8

An offeree who wishes to bind the offeror to the contract may do which of the following with an offer?

A) Accept it
B) Modify it slightly before acceptance
C) Withdraw it prior to acceptance
D) Accept and counter with conditions

Question 9

Which of the following is an essential element of a contract?

A) A counter offer
B) Acceptance
C) Performance
D) A fair price

Question 10

All of the following are essential elements of a contract EXCEPT

A) competent parties.
B) lawful objective.
C) monetary consideration.
D) meeting of the minds.

Question 11

The party making an offer is called the

A) offeree.
B) grantee.
C) offeror.
D) agent.

Question 12

A lease is an example of a

A) non-contractual agreement.
B) declaration of intent.
C) unilateral contract.
D) bilateral contract.

Question 13

Which of the following are considered to be legally competent?

A) Corporations
B) Persons of unsound mind
C) Minors
D) A 15 year old woman

Question 14

When one party to a contract makes a promise without first receiving any promise of performance from the other, it is called

A) a bilateral contract.
B) an implied contract.
C) a unilateral contract.
D) an executory contract.

Question 15

A real estate contract can be declared void if

A) it is signed and not read.
B) It is signed with a witnessed X.
C) signed by only one party.
D) it is signed by an unmarried minor.

Question 16

A contract that results when a promise is exchanged for a promise is called

A) bilateral contract.
B) unilateral contract.
C) express contract.
D) implied contract.

Question 17

To be legally competent, a person must reach the age of

A) minority.
B) majority.
C) reasonable competence.
D) 17 years.

Question 18

Assuming that no fraud is intended, what is the status of a contract signed by an illiterate person?

A) Valid
B) Void
C) Voidable
D) Unenforceable

Question 19

In the absence of a special provision for such an event, an offer to purchase will probably be voided

A) by the death of either buyer or seller before acceptance.
B) if the seller changes his mind after accepting the offer.
C) if not accepted within 24 hours.
D) if the seller should receive a higher offer from another buyer.

Question 20

A meeting of the minds creating enforceable rights is called

A) a contract.
B) an estoppel.
C) a lien.
D) a deed.

Question 21

A contract can be discharged by novation.

Question 22

An executory contract is a

A) contract which has been completely executed.
B) contract in which certain things are still to be done.
C) will in probate for which an executor has been named.
D) contract which has not been signed.

Question 23

If a contract is considered voidable, it is valid until voided.

Question 24

A man put up $10,000 as earnest money on a property for sale. The next day, he needed the money back and attempted to cancel his offer. Which of the following is true?

A) He can get out of the offer because he has a three day right of rescission.
B) The decision would be entirely up to the broker.
C) He can get out of the offer because of the six-day right of rescission.
D) He would have to revoke the offer before the seller accepted it.

Question 25

Two persons make an oral agreement. A day later they put it in writing with several small changes. What is true about the agreement in a court of law?

A) The oral one would prevail
B) The written one would prevail
C) A new agreement must be made
D) The agreement must be notarized to be legal

Question 26

The broker and the seller know of major plumbing repairs to be made. They sell the house to a buyer "as is" but do not disclose the plumbing problems. The buyer discovers the defects after closing and sues the broker and seller. Most likely, the buyer can collect, because the defect should have been disclosed.

Question 27

If a contract is made under duress, it would be void.

Question 28

A real estate contract can be declared void if it is not signed.

Question 29

The term "rescinded" in real estate means

A) rewritten.
B) rejected.
C) reworded.
D) canceled.

Question 30

An acknowledgement is necessary for a valid real estate contract.

Question 31

A real estate broker could most likely be held liable to a buyer if the broker

A) makes a misrepresentation to the buyer based on false information given to him by the seller.
B) signs an agreement with the buyer on behalf of the seller under the power of attorney granted by the seller.
C) acts in excess of the authority given to him by the seller under a listing agreement.
D) retains the buyer's check at the seller's request after an offer has been accepted by the seller and acceptance has been communicated to the buyer.

Question 32

If a contract is breached and the damaged party wants the contract carried out, he would sue for

A) specific performance.
B) money damages.
C) novation.
D) unilateral rescission.

Question 33

Money or anything worth money exchanged in a contract is classified as unilateral consideration.

Question 34

The requirement that transfers of real property be in writing is known as

A) contract law.
B) the bill of rights.
C) the statute of frauds.
D) due process.

Question 35

The sum of money agreed upon in advance to be the damages in the event certain problems occur later is best described as

A) judgement damages.
B) liquidated damages.
C) default damages.
D) punitive damages.

Question 36

The absence of duress, menace and undue influence are requirements of lawful objective.

Question 37

The statute of limitations concerns time limits for filing a lawsuit.

Question 38

When the prospective tenant signed the lease, he indicated that he would be using the building to sell appliances. Later, the landlord discovered that illegal bingo games were being played there. What can the landlord do?

A) He can do nothing as long as the tenant is current with the rent.
B) He can declare the lease void and start eviction proceedings.
C) He must have a conversation with the tenant to try to persuade him to stop the illegal activity.
D) He can organize a boycott.

Question 39

A contract that results not from a written or oral agreement but from the actions of the parties involved is called an expressed contract.

Question 40

A contract created under duress is

A) invalid.
B) voidable.
C) unenforceable.
D) void.

Question 41

A contract that has no binding effect on the parties who made it is a(n)____________________ contract.

Question 42

Under certain circumstances the ____________________ evidence rule permits oral evidence to complete an otherwise incomplete or ambiguous written contract.

Question 43

A fraud is an act intended to deceive for the purpose of inducing another to part with something of value.

Question 44

A lawsuit for specific performance is an action in court to force the innocent party to carry out the remainder of the contract.

Question 45

The purpose of requiring consideration is to demonstrate that a bargain has been struck between the parties to the contract.

Question 46

Under certain circumstances, the innocent party can unilaterally rescind a contract.

Question 47

Once the seller accepts an offer, if the buyer fails to complete the purchase, the seller may keep the buyer's deposit as ______________________________.

Question 48

A promise not to act by one or more of the parties to a contract is known as ____________________.

Question 49

A contract that is in the process of being carried out is said to be ____________________, that is, in the process of being performed.

Question 50

Partial performance may never be accepted as a remedy for breach of contract.

Question 51

A unilateral contract results when a promise is exchanged for a promise.

Question 52

As a requirement of a valid contract ____________________ and ____________________ requires that one party makes an offer to another party.

Question 53

Rights, benefits, and obligations under a contract can not be assigned to someone else.

Question 54

For an agreement to be enforceable it must be supported by ____________________ to demonstrate that a bargain has been struck between the parties to the contract.

Question 55

A minor change in the terms of a contract does not constitute a counteroffer.

Question 56

A lawsuit for _________________________ is an action in court by the innocent party to force the breaching party to carry out the remainder of the contract according to the precise terms, price and conditions agreed upon.

Question 57

A(n)____________________ contract results when a promise is exchanged for performance.

Question 58

An alternative to mutual recession is novation.

Question 59

A(n)____________________ contract occurs when the parties to the contract declare their intentions either orally or in writing.

Question 60

A mistake includes innocent misrepresentation, ignorance, inability, or poor judgment.

Question 61

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
a person who is considered legally capable of entering into a contract

Question 62

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
the substitution of a new contract for an existing one

Question 63

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
an offer made in response to an offer

Question 64

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
use of force to obtain contract agreement

Question 65

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
the person holding a power of attorney on behalf of another

Question 66

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
failure, without legal excuse, to perform any promise called for in a contract

Question 67

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
an act intended to deceive for the purpose of inducing another to part with something of value

Question 68

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
a meeting of the minds

Question 69

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
damages that can be measured in and compensated by money

Question 70

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
the party who makes an offer

Question 71

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
to transfer one's rights in a contract to another person

Question 72

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
a contract in which one party makes a promise or begins performance without first receiving any promise to perform from the other

Question 73

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
an act or promise given in exchange for something

Question 74

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
not to act

Question 75

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
contract performance according to the precise terms agreed upon

Question 76

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
requires all contracts for the sale of land to be in writing to be enforceable in a court of law

Question 77

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
a contract that is not legally binding on any of the parties that made it

Question 78

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
a contract that is able to be voided by one of its parties

Question 79

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
to cancel a contract and restore the parties involved to their respective positions before the contract was made

Question 80

Choose the one most appropriate answer for each.
a.assign
k.money damages
b.attorney-in-fact
l.mutual agreement
c.breach of contract
m.novation
d.competent party
n.offeror
e.consideration
o.rescind
f.counteroffer
p.specific performance
g.duress
q.statute of frauds
h.forbear
r.unilateral contract
i.fraud
s.void contract
j.liquidated damages
t.voidable contract
a sum of money called for in a contract that is to be paid if the contract is breached