TEXAS PROMULGATED CONTRACTS EXAM
STUDY GUIDE 2026
◉ Unilateral Contract. Answer: A contract in which only one party is
obligated to perform
◉ Consideration. Answer: Something given in exchange for a
promise
◉ Option. Answer: An agreement between a buyer and seller giving
the buyer the right to purchase a property at a preset price for a
given period of time.
◉ Unenforceable Contract. Answer: A contract that cannot be
enforced due to some flaw or other issue in the contract.
◉ Valid Contract. Answer: one that meets all the requirements of
law; Competent Parties, Offer and Acceptance, Legal Purpose, In
Writing (when required by law), Consideration
◉ Void Contract. Answer: invalid from the beginning, and has no
effect on the parties, i.e. illegal act
,◉ Voidable Contract. Answer: one that cannot be enforced against
one or more of the parties, i.e. contract entered into with a minor
◉ Executory Contract. Answer: a contract that is binding on the
parties, with one or more of the parties having contractual duties
that have not yet been performed. The effective date is the date that
acceptance was communicated to the offering party.
◉ Bilateral Contract. Answer: Both parties are obligated to perform,
i.e. a contract of sale between a buyer and a seller
◉ Assignment. Answer: Transfers all of the rights related to the
contract to another party known as an assignee. The assignee
assumes primary liability for the performance under the contracts,
and the assignor, unless released, remains secondarily liable.
◉ Novation. Answer: Occurs when a new contract is substituted for
an existing one.
◉ T or F - Contracts may be valid, void, voidable, but not
unenforceable.. Answer: Fales
◉ T or F - Though the sale is closed, that doesn't necessarily mean
the contract has been fully executed.. Answer: Fales
,◉ T or F - Contracts executed by minors are generally voidable at the
option of the minor, but may be enforced by the minor against the
adult party.. Answer: True
◉ T or F - Changes to the sale price, down payment or amount
financed may not be agreed to by the partied for any reason.
Answer: False
◉ T or F - All oral negotiations are voluntary, and do not become
binding until written.. Answer: True
◉ T or F - All states have a limitation of time in which an individual
may file suit in court for damages because a party breaches
contract.. Answer: True
◉ T or F - A contract for an illegal purpose is void, and the law treats
the contract as if it were never created.. Answer: True
◉ T or F - An novation to a contract is an attachment that adds or
further describes the rights and duties of the parties.. Answer: False
◉ T or F - An addendum to a contract occurs when a new contract is
substituted for an existing one.. Answer: False
, ◉ T or F - Once all the terms of an offer have been agreed to and
signed by the parties, and the acceptance communicated to the
offeror, the contract becomes binding on the parties.. Answer: True
◉ The five essential elements that must exist for a real estate sales
contract to be considered valid and enforceable are: legal purpose,
competent parties, mutual consent, consideration and ______________.
a. signature of witnesses
b. in writing
c. acknowledgment by a notary
d. recording in county clerks office. Answer: B
◉ If a contract has been entered into with a person who has been
judged to be incompetent, that contract is considered __________
because that person never had the capacity to enter into it.
a. executed
b. valid
c. voidable
d. void. Answer: D
◉ Tammy is interested in Jolene's property, but wants to research
the zoning laws before purchasing. She has an agreement in which
STUDY GUIDE 2026
◉ Unilateral Contract. Answer: A contract in which only one party is
obligated to perform
◉ Consideration. Answer: Something given in exchange for a
promise
◉ Option. Answer: An agreement between a buyer and seller giving
the buyer the right to purchase a property at a preset price for a
given period of time.
◉ Unenforceable Contract. Answer: A contract that cannot be
enforced due to some flaw or other issue in the contract.
◉ Valid Contract. Answer: one that meets all the requirements of
law; Competent Parties, Offer and Acceptance, Legal Purpose, In
Writing (when required by law), Consideration
◉ Void Contract. Answer: invalid from the beginning, and has no
effect on the parties, i.e. illegal act
,◉ Voidable Contract. Answer: one that cannot be enforced against
one or more of the parties, i.e. contract entered into with a minor
◉ Executory Contract. Answer: a contract that is binding on the
parties, with one or more of the parties having contractual duties
that have not yet been performed. The effective date is the date that
acceptance was communicated to the offering party.
◉ Bilateral Contract. Answer: Both parties are obligated to perform,
i.e. a contract of sale between a buyer and a seller
◉ Assignment. Answer: Transfers all of the rights related to the
contract to another party known as an assignee. The assignee
assumes primary liability for the performance under the contracts,
and the assignor, unless released, remains secondarily liable.
◉ Novation. Answer: Occurs when a new contract is substituted for
an existing one.
◉ T or F - Contracts may be valid, void, voidable, but not
unenforceable.. Answer: Fales
◉ T or F - Though the sale is closed, that doesn't necessarily mean
the contract has been fully executed.. Answer: Fales
,◉ T or F - Contracts executed by minors are generally voidable at the
option of the minor, but may be enforced by the minor against the
adult party.. Answer: True
◉ T or F - Changes to the sale price, down payment or amount
financed may not be agreed to by the partied for any reason.
Answer: False
◉ T or F - All oral negotiations are voluntary, and do not become
binding until written.. Answer: True
◉ T or F - All states have a limitation of time in which an individual
may file suit in court for damages because a party breaches
contract.. Answer: True
◉ T or F - A contract for an illegal purpose is void, and the law treats
the contract as if it were never created.. Answer: True
◉ T or F - An novation to a contract is an attachment that adds or
further describes the rights and duties of the parties.. Answer: False
◉ T or F - An addendum to a contract occurs when a new contract is
substituted for an existing one.. Answer: False
, ◉ T or F - Once all the terms of an offer have been agreed to and
signed by the parties, and the acceptance communicated to the
offeror, the contract becomes binding on the parties.. Answer: True
◉ The five essential elements that must exist for a real estate sales
contract to be considered valid and enforceable are: legal purpose,
competent parties, mutual consent, consideration and ______________.
a. signature of witnesses
b. in writing
c. acknowledgment by a notary
d. recording in county clerks office. Answer: B
◉ If a contract has been entered into with a person who has been
judged to be incompetent, that contract is considered __________
because that person never had the capacity to enter into it.
a. executed
b. valid
c. voidable
d. void. Answer: D
◉ Tammy is interested in Jolene's property, but wants to research
the zoning laws before purchasing. She has an agreement in which
