CHAMPION SCHOOL OF REAL ESTATE
LAW OF CONTRACTS STUDY GUIDE 2026
EXAM QUESTIONS AND VERIFIED
SOLUTIONS
⩥ Real Estate Recovery Trust Account. Answer: administered by TREC.
the purpose of the account is to protect aggrieved individuals who suffer
monetary loss due to illegal acts of license holders
⩥ unlawful practice of law. Answer: license holder is not qualified to
add provisions to contracts that go beyond factual business details.
⩥ Promulgated Forms. Answer: residential contract forms that are
mandatory for license holder
⩥ Deceptive trade practices Act. Answer: Texas law that applies to trade
and commerce that was passed in 1973. Part of the Texas Business and
Commerce code
⩥ Land. Answer: surface of the earth extending downward to the center
and upward above the surface to infinity
⩥ Real Estate. Answer: all that encompassed in land with the addition of
all man-made additions to the land (improvements)
,⩥ Real Property. Answer: goes beyond physical real estate and includes
the rights that a person has in the land.
⩥ Bundle of Rights. Answer: rights that a person has in the land
⩥ severable. Answer: different rights can be separate
⩥ Surface Rights. Answer: the ability to develop the surface and to use
resources extracted from or near the surface
⩥ Subsurface Rights. Answer: rights to oil, gas and minerals, are
commonly conveyed through a lease, mineral deed or reservation
⩥ Air Rights. Answer: extend above the surface without limitations
⩥ improvements. Answer: man-made additions to the land that is
permanent and is considered to become part of the land
⩥ personalty/chattel. Answer: personal property
⩥ bill of sale. Answer: used to accomplish the transfer of personal
property, accompanies the deed
, ⩥ Fixture. Answer: personal property that has become attached to the
land
⩥ annexation. Answer: personal property that becomes real property
⩥ severance. Answer: removing fixtures to become personal property
⩥ Physical Characteristics of Land. Answer: Indestructibility-cannot be
destroyed
Immobility-cannot be moved
Non-homogeneity-no two parcels are the same
⩥ Economic Characteristics of Land. Answer: Scarcity-supply and
demand
Modification-value is affected by man made changes
Fixity-additions take long periods of time to pay
Situs-location, location, location
⩥ Estate in Severalty. Answer: ownership by one individiual
⩥ Co-Ownership. Answer: ownership by two or more
LAW OF CONTRACTS STUDY GUIDE 2026
EXAM QUESTIONS AND VERIFIED
SOLUTIONS
⩥ Real Estate Recovery Trust Account. Answer: administered by TREC.
the purpose of the account is to protect aggrieved individuals who suffer
monetary loss due to illegal acts of license holders
⩥ unlawful practice of law. Answer: license holder is not qualified to
add provisions to contracts that go beyond factual business details.
⩥ Promulgated Forms. Answer: residential contract forms that are
mandatory for license holder
⩥ Deceptive trade practices Act. Answer: Texas law that applies to trade
and commerce that was passed in 1973. Part of the Texas Business and
Commerce code
⩥ Land. Answer: surface of the earth extending downward to the center
and upward above the surface to infinity
⩥ Real Estate. Answer: all that encompassed in land with the addition of
all man-made additions to the land (improvements)
,⩥ Real Property. Answer: goes beyond physical real estate and includes
the rights that a person has in the land.
⩥ Bundle of Rights. Answer: rights that a person has in the land
⩥ severable. Answer: different rights can be separate
⩥ Surface Rights. Answer: the ability to develop the surface and to use
resources extracted from or near the surface
⩥ Subsurface Rights. Answer: rights to oil, gas and minerals, are
commonly conveyed through a lease, mineral deed or reservation
⩥ Air Rights. Answer: extend above the surface without limitations
⩥ improvements. Answer: man-made additions to the land that is
permanent and is considered to become part of the land
⩥ personalty/chattel. Answer: personal property
⩥ bill of sale. Answer: used to accomplish the transfer of personal
property, accompanies the deed
, ⩥ Fixture. Answer: personal property that has become attached to the
land
⩥ annexation. Answer: personal property that becomes real property
⩥ severance. Answer: removing fixtures to become personal property
⩥ Physical Characteristics of Land. Answer: Indestructibility-cannot be
destroyed
Immobility-cannot be moved
Non-homogeneity-no two parcels are the same
⩥ Economic Characteristics of Land. Answer: Scarcity-supply and
demand
Modification-value is affected by man made changes
Fixity-additions take long periods of time to pay
Situs-location, location, location
⩥ Estate in Severalty. Answer: ownership by one individiual
⩥ Co-Ownership. Answer: ownership by two or more
