LAW OF CONTRACTS #1251 EXAM
QUESTIONS AND ANSWERS GRADED A+
2025/2026
The mission of ________________________________________ is to protect consumers'
economic welfare by ensuring that licensees properly carry out their fiduciary responsibilities to
clients, are qualified and competent, and adhere to professional standards. - ANS TREC
____________________________ is the law which established the Texas Real Estate
Commission, who is responsible for its enforcement. It governs the licensure and lawful
behavior of real estate brokers and salespersons. - ANS TRELA
A _____________________that relates to the contractual obligations between a seller of real
estate and a license holder acting as an agent for the seller must include a provision informing
the parties to the contract that real estate commissions are negotiable. - ANS listing contract
Drafting an instrument, other than a form described by Section 1101.155, that transfers or
otherwise affects an interest in real property is considered the __________________________.
- ANS unauthorized practice of law
The Texas Real Estate Broker-Lawyer Committee was created in ________. It drafts and revises
contract forms for use by real estate licensees. - ANS 1983
A license holder may not practice _________, give advice or opinions concerning the status or
validity of title, and or attempt to discourage any principal from employing a lawyer. -
ANS law
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Personal property is conveyed with a __________. - ANS bill of sale
Real property is conveyed with a __________. - ANS deed
Many areas of the promulgated contract provide for termination. The most obvious is paragraph
23, "Termination Option." For a sum of money negotiated between the parties, the buyer has a
time period, stated in this paragraph, for the __________________ right to terminate. -
ANS unrestricted
The ________ must disclose the condition of the property to the buyer. - ANS seller
A lawsuit must be filed within ___________ after the date on which the false, misleading or
deceptive act occurred. - ANS 2 years
In a legal subdivision, legal descriptions are recorded in the county courthouse where the
property is located.
A. True
B. False - ANS True
"Unconscionable action or course of action" means an act or practice which, to a consumer's
disadvantage, takes benefit of the lack of knowledge, ability, experience, or capacity of the
consumer to a grossly unfair degree.
A. True
B. False - ANS True
An auctioneer is required to have a real estate license.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A. True
B. False - ANS False
Acting as a principal, a person may purchase, sell, lease, or sublease real estate for profit
without being licensed as a broker or salesperson.
A. True
B. False - ANS True
The maximum amount the Recovery Fund will pay for a single transaction is $200,000.
A. True
B. False - ANS False
The Joint Broker-Lawyer Committee has 6 members.
A. True
B. False - ANS False
The members of the Joint Broker-Lawyer Committee served six-year staggered terms.
A. True
B. False - ANS True
The term used for TREC's approved contracts is "promulgated."
A. True
B. False - ANS True
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, A licensee may give opinions concerning the status or validity of the title policy.
.
A. True
B. False - ANS False
The Joint Broker-Lawyer drafts long-term lease contracts as well as commercial contracts.
A. True
B. False - ANS False
What Act created the Texas Real Estate Commission?
A. The Deceptive Trade Practices Act
B. The Texas Real Estate License Act
C. The Easement and Right of Way Act
D. The Texas Property Code - ANS The Texas Real Estate License Act
When was the Texas Real Estate Commission created?
A. 1909
B. 1949
C. 1929
D. 1960 - ANS 1949
The Joint Broker-Lawyer Committee is made up of all of the following people EXCEPT:
A. Real estate brokers
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS GRADED A+
2025/2026
The mission of ________________________________________ is to protect consumers'
economic welfare by ensuring that licensees properly carry out their fiduciary responsibilities to
clients, are qualified and competent, and adhere to professional standards. - ANS TREC
____________________________ is the law which established the Texas Real Estate
Commission, who is responsible for its enforcement. It governs the licensure and lawful
behavior of real estate brokers and salespersons. - ANS TRELA
A _____________________that relates to the contractual obligations between a seller of real
estate and a license holder acting as an agent for the seller must include a provision informing
the parties to the contract that real estate commissions are negotiable. - ANS listing contract
Drafting an instrument, other than a form described by Section 1101.155, that transfers or
otherwise affects an interest in real property is considered the __________________________.
- ANS unauthorized practice of law
The Texas Real Estate Broker-Lawyer Committee was created in ________. It drafts and revises
contract forms for use by real estate licensees. - ANS 1983
A license holder may not practice _________, give advice or opinions concerning the status or
validity of title, and or attempt to discourage any principal from employing a lawyer. -
ANS law
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Personal property is conveyed with a __________. - ANS bill of sale
Real property is conveyed with a __________. - ANS deed
Many areas of the promulgated contract provide for termination. The most obvious is paragraph
23, "Termination Option." For a sum of money negotiated between the parties, the buyer has a
time period, stated in this paragraph, for the __________________ right to terminate. -
ANS unrestricted
The ________ must disclose the condition of the property to the buyer. - ANS seller
A lawsuit must be filed within ___________ after the date on which the false, misleading or
deceptive act occurred. - ANS 2 years
In a legal subdivision, legal descriptions are recorded in the county courthouse where the
property is located.
A. True
B. False - ANS True
"Unconscionable action or course of action" means an act or practice which, to a consumer's
disadvantage, takes benefit of the lack of knowledge, ability, experience, or capacity of the
consumer to a grossly unfair degree.
A. True
B. False - ANS True
An auctioneer is required to have a real estate license.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A. True
B. False - ANS False
Acting as a principal, a person may purchase, sell, lease, or sublease real estate for profit
without being licensed as a broker or salesperson.
A. True
B. False - ANS True
The maximum amount the Recovery Fund will pay for a single transaction is $200,000.
A. True
B. False - ANS False
The Joint Broker-Lawyer Committee has 6 members.
A. True
B. False - ANS False
The members of the Joint Broker-Lawyer Committee served six-year staggered terms.
A. True
B. False - ANS True
The term used for TREC's approved contracts is "promulgated."
A. True
B. False - ANS True
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, A licensee may give opinions concerning the status or validity of the title policy.
.
A. True
B. False - ANS False
The Joint Broker-Lawyer drafts long-term lease contracts as well as commercial contracts.
A. True
B. False - ANS False
What Act created the Texas Real Estate Commission?
A. The Deceptive Trade Practices Act
B. The Texas Real Estate License Act
C. The Easement and Right of Way Act
D. The Texas Property Code - ANS The Texas Real Estate License Act
When was the Texas Real Estate Commission created?
A. 1909
B. 1949
C. 1929
D. 1960 - ANS 1949
The Joint Broker-Lawyer Committee is made up of all of the following people EXCEPT:
A. Real estate brokers
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
