Question 1

If the seller cannot perform a real estate contract because title is not marketable, the purchaser is entitled to a return of the earnest money.

Accepted Answer

If the seller is unable to transfer a marketable title, the purchaser is entitled to a return of the earnest money as stated in most real estate contracts.

Question 2

In an option contract for the sale of real estate the purchaser is not required to purchase the property

Accepted Answer

In an option contract, the purchaser has the option but not the obligation to purchase the property.

Question 3

Certain restrictions and/or liens will cause a real estate title to become unmarketable.Which of the following, as a general rule, will make the title unmarketable?

Accepted Answer

Easements and mortgages can make a title unmarketable as they represent claims or rights on the property that can affect its transferability.

Question 4

Amy negotiated the sale of her property to Carrie.After the contract was signed, Amy and Carrie also orally agree that Amy would pay to clear a large tree from the front yard.Later, Amy refuses to remove the tree and Carrie sues her.Under the parol evidence rule:

Accepted Answer

The parol evidence rule generally excludes prior or contemporaneous oral agreements that contradict a written contract, but it allows for oral agreements made after the contract is signed, as they can be considered modifications to the contract.

Question 5

The writing requirement of the Statute of Frauds is strictly enforced and allows
for no exceptions.

Accepted Answer

While the writing requirement of the Statute of Frauds is generally enforced, there are some exceptions, such as part performance and promissory estoppel.

Question 6

The general rule for real estate contracts is that when the contract is silent on marketable title, the vendor does not have to convey a marketable title.

Accepted Answer

The general rule for real estate contracts is that the vendor must convey a marketable title unless the contract explicitly states otherwise. If the contract is silent on marketable title, the vendor still has an obligation to provide a marketable title.

Question 7

In a mediation, the mediator typically can impose a binding agreement on the disputing parties,

Accepted Answer

The mediator's role is to facilitate communication and negotiation between the disputing parties, but they do not have the authority to impose a binding agreement. The agreement reached in mediation is voluntary and based on the parties' willingness to compromise and find a mutually acceptable solution.

Question 8

If a closing date is not specified in a real estate contract, the contract will be unenforceable.

Accepted Answer

While it is always best to have a closing date specified in a real estate contract, the absence of one does not automatically render the contract unenforceable. The parties may still be able to come to an agreement on a closing date and fulfill the terms of the contract. However, it can lead to confusion and disputes, so it is generally recommended to include a specific closing date in the contract.

Question 9

Cassidy sells her home to Sara "As Is." Cassidy, however, purposely fails to reveal a serious toxic mold problem that is hidden from anyone's view.Since Sara bought the home "As Is," she has no legal recourse against Cassidy.

Accepted Answer

Although the sale was "As Is," Cassidy had a duty to disclose known defects that were not visible to a buyer. By intentionally failing to reveal the toxic mold problem, Cassidy committed fraud and Sara may have legal recourse.

Question 10

A "letter of intent" is an instrument that generally is meant to convey an offer.

Accepted Answer

The answer of A "letter of intent" is an instrument...

Question 11

7.A contract required to be in writing under the Statute of Frauds must have the signatures of both parties to the contract before it can be enforceable against any one of the parties.

Accepted Answer

The answer of 7.A contract required to be in writing...

Question 12

The Electronic Signatures in Global and National Commerce Act (E-Sign)is a federal law that legalizes the use of electronic signatures even if they might violate a state's Statute of Frauds law.

Accepted Answer

The Electronic Signatures in Global and National Commerce Act (E-Sign) does legalize the use of electronic signatures and overrides any state law that requires a signature to be in writing or signed with a pen. This includes the Statute of Frauds law.

Question 13

On June 5, Will mailed Sidney an offer to buy Sidney's lot for $35,000.On June 7, Sidney mailed a counteroffer in which he offered the lot to Will in exchange for $35,000 and Will's 1988 Sports Coupe.Later, on June 7, Will mailed Sidney a revocation of his (Will's)offer.Which of the following correctly describes the situation? (Select one, assuming that all letters arrived in the same order in which they were sent.)

Accepted Answer

Sidney's counteroffer terminated Will's original offer, so there is no contract. Will can choose to accept Sidney's counteroffer, but as of now, no contract exists.

Question 14

Under the "mailbox rule," the offer is accepted once the acceptance is mailed even though the offeror has no knowledge of it.

Accepted Answer

The mailbox rule states that an offer is considered accepted at the time it is mailed, regardless of when it is received by the offeror. This rule is based on the idea that once an acceptance is mailed, the offeree cannot change their mind and revoke the acceptance, as it is already in transit. However, some exceptions apply, such as when the offeror specifies a different means of acceptance or when the acceptance is received after the offer has been revoked.

Question 15

Times should be established in the real estate contract for which of the following:

Accepted Answer

All of the above should have established times in the real estate contract to ensure a smooth and timely transaction. The delivery of evidence of title, review of title, closing date, and possession by the buyer are all important factors that need to be outlined with specific timeframes in the contract to avoid any confusion or delays.

Question 16

The essential terms that must be included in a real estate contract may be written on almost any type of document.

Accepted Answer

The essential terms of a real estate contract, such as the identity of the parties, the description of the property, the purchase price, and the signatures of the parties, can indeed be written on almost any type of document, as long as the document clearly expresses the intent of the parties to enter into a binding agreement and meets the legal requirements for a valid contract.

Question 17

If a vendor dies after signing a real estate contract but before the closing, the purchase price will pass to the vendor's estate as real property, while the interest of a deceased vendee would pass as personal property.

Accepted Answer

If the vendee dies before the closing, their interest would pass to their heirs or beneficiaries as real property, while the purchase price would still pass to the vendor's estate.

Question 18

Assume that State A's Marketable Record Title Act provides that any legal claims against property that are older than 30 years are invalid.Sam, his father and grandfather have been using a road to cross Peter's land for 50 years.Sam's claim will stand despite the Act.

Accepted Answer

Sam and his family have been using the road for 50 years, which exceeds the 30-year limit set by the Marketable Record Title Act. Therefore, Sam's claim will stand despite the Act.

Question 19

Which of the following is not one of the essential terms in a real estate contract?

Accepted Answer

All other options (A, B, C, E) are essential terms in a real estate contract. The description of real estate establishes the property being sold, the price establishes the amount to be paid, the names of the buyer and seller signify who is entering the agreement, and signatures of the parties show acceptance of the terms. While including a list of fixtures to be retained by the seller is typically included in a contract, it is not considered an essential term, as it can vary from one agreement to another.

Question 20

The parol evidence rule provides that if the parties have put their contract in writing and intend the writing to be their final agreement, evidence of prior or future agreements may not be used in court to vary or contradict the written agreement.

Accepted Answer

The answer of The parol evidence rule provides that if...

Quiz 7: The Real Estate Contract