Chapter 4: Review Of Colorado Contract Law/ Exam Review Questions & Answers, Graded A+.| Latest Update 2024/25|

CHAPTER 4: REVIEW OF COLORADO CONTRACT LAW/ EXAM REVIEW QUESTIONS & ANSWERS, GRADED A+. Unit 2-4 Conway-Bogue - -The Supreme Court determined that many of the acts performed by real estate brokers do constitute the practice of law. This includes preparing deeds, leases, completing standard and approved contract forms, etc., and giving explanation or advice as to the legal effect of these forms. It also concluded that licensed real estate brokers may prepare these sale, loan, and leasing documents (that normally only attorneys-at-law may prepare) only for their own customers in transactions in which they are acting as a real estate broker. Conway-Bogue: The courts said it reached its decision based on: - -A scarcity of lawyers in many parts of the state. (Remember, this was in the 1950's.) A 50+-year history of the public seeking brokers rather than lawyers to conduct real estate transactions. No record of any public or lawyer harm from the (then) current practice. No move by the legislature to stop this "alleged evil" practice. The Court found that to prohibit brokers from this limited practice of law would "not be in the public interest." The Colorado Association of REALTORS® legal counsel cautioned its members that the broker's activity must be limited as to: - -Brokers must be connected to the transaction as broker. Brokers may not charge for legal document preparation. Brokers may only prepare "commonly used, printed, standard and approved forms." (Instructor's Note: This is the precursor to Rule F-7 and the Commission-approved forms in required use today.) Clearly, brokers must NOT prepare: - -Legal documents as a business, courtesy or favor, whether paid or not, when not connected to the transaction as a broker. Documents that are not on standard and approved printed forms. Wills or other legal documents beyond those customary in a real estate transaction. C.A.R.'s attorney also warned that it would appear in the best interests of the public and also in conformity with the Court's opinion for brokers to: - -Always recommend that title be examined. Inform the parties of their right to have legal documents prepared by their own choice of lawyers. Advise the parties of their right to have a lawyer represent them at closing. Seek attorney assistance when legal complications are beyond the broker's knowledge. The legal summary issued by C.A.R.'s legal counsel in 1957 ended with the following caution: - -"It is to the interest OF EVERY BROKER (emphasis added) that these limitations be properly recognized and followed so that the Supreme Court would not have reason to change its opinion at a later date." Facts: - -"Standard and Approved" Forms were not defined in the court opinion, and were not given over to the Real Estate Commission with the adoption of Rule F until 1971. (Instructor's note: Rule F will be covered along with the forms themselves in a following section of this course.) The authority to complete standard forms was not codified into the license law (C.R.S. 12-61-803(4)) until 1993. Title Companies & Their Duties: " The Court issued one decision from the cases taken together. It held that the title companies" : - - Could prepare papers related to loans made from their own funds. Could not prepare/charge for legal documents for othe