©THEBRIGHT EXAM SOLUTIONS
11/05/2024 1:06 AM
PROMULGATED CONTRACTS Exam
Questions With Correct Answers
Contract: - answer✔A legally binding and enforceable agreement to do or not to do a specific thing
Promulgated Contract: - answer✔A contract that has been approved and is required to be used by
license holders
In Texas, what are the two entities that promulgate contracts? - answer✔TREC and TAR
In a real estate sale, the license holder must use the appropriate TREC-promulgated form UNLESS
another contract form is required by the buyer's lender. - answer✔FALSE
(Explanation: In a real estate sale, the license holder must use the appropriate TREC-promulgated form
UNLESS another contract form is required by the property owner. The buyer's lender has no influence
over the sales contracts used in a transaction.)
A license holder should ___________. - answer✔disclose all material facts to the client
Legally Competent: - answer✔When an individual has reached the age of majority (18 years of age) and
has not been declared mentally incompetent by a judge
Void Contract: - answer✔A contract that has no legal effect
Voidable Contract: - answer✔When one or more of the parties has the authority to rescind the contract
Consideration: - answer✔A valuable item that each party exchanges in order to demonstrate that they
agree to the contract terms
Which of the following is TRUE of mutual agreement? - answer✔There cannot be mistakes in the terms
and conditions
All of the following are essential elements of a valid contract EXCEPT: - answer✔earnest money
What is NOT an element of a valid contract? - answer✔earnest money
A law that requires real estate contracts to be in writing is the ______. - answer✔statute of Frauds
Valid Contract: - answer✔Legal agreement meeting all the essential, basic requirements of the law
, ©THEBRIGHT EXAM SOLUTIONS
11/05/2024 1:06 AM
Unenforceable Contract: - answer✔A contract that cannot be enforced by the courts
5 essential elements of a valid contract: - answer✔1.Mutual assent (100% agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
If two people have a contract for one to sell illegal drugs to the other, the contract would be: -
answer✔Void
A contract that cannot be enforced by the courts is _____. - answer✔unenforceable
Executory Contract: - answer✔A contract that is not completely executed or performed
Executed Contract: - answer✔A contract in which all terms have been fulfilled by all parties
A contract that is "pending" is __________________. - answer✔executory
The difference between an executory contract and an executed contract is that the executed contract is
_____. - answer✔closed
The best way for any contract to terminate is to become _________________. - answer✔executed
According to Texas state law, a contract for deed and a lease with an option to buy are considered
___________. - answer✔executory contracts
Bilateral Contract: - answer✔A contract in which one party must promise to do something for another
party and that party must promise to do something for the first party
Unilateral Contract: - answer✔A contract made between two or more parties in which only one of those
parties makes a promise or otherwise accepts an obligation
An option to buy contract is a(n)_________________. - answer✔Unilateral Contract
Which of the following is a bilateral contract? - answer✔leases
If a contract says "time is of the essence," that means that it is due: - answer✔as soon as possible
By whom should the language "time of the essence" be added? - answer✔an attorney
Addenda: - answer✔Materials added to and included in the initial contract that provide more
information on the transaction
, ©THEBRIGHT EXAM SOLUTIONS
11/05/2024 1:06 AM
Amendment: - answer✔Items that are attached to the original document and should never be changed
after the document has been signed and accepted
When filling out the nine checkable box options on the Amendment to Contract form, more than one
box can be checked. - answer✔TRUE
In which situation would an amendment go into effect? - answer✔the parties sign to amendment
TREC promulgated addenda are added to the contract AFTER it has been signed. - answer✔FALSE
(Explanation: Addenda are added to the contract BEFORE the contract has been signed. Amendments
are added afterwards.)
Performance: - answer✔The responsibility of all the parties to carry out their part of a contract
Quitclaim Deed: - answer✔Transfers ownership of whatever the grantor owns but make no guarantee of
ownership and no promise to defend
Novation: - answer✔The substitution of a new contract for an existing contract, relieves the original
party of liability
Obligations often times must be completed within a certain number of days of _____. - answer✔the
effective date
If one of the parties defaults and the non-defaulting party accepts the earnest money as damages, they
may also: - answer✔Do nothing more, as the contract is terminated.
To transfer contract obligations without necessarily relieving the original party from obligations, you
need a(n) __________. - answer✔assignment
Statute of Limitation: - answer✔A law establishing a time limit for civil suits
The Doctrine of Laches is the same thing as the Statutes of Limitations. - answer✔FALSE
(Explanation: The Doctrine of Laches is based on common law, while Statutes of Limitations are written
and codified.)
One-Year Limitation Period: - answer✔Malicious prosecution, libel, slander, or breach of promise of
marriage not later than one year after the day the cause of action accrues
Two-Year Limitation Period: - answer✔Trespass for injury to the estate or to the property of another,
conversion of personal property, taking or detaining the personal property of another, personal injury,
forcible entry and detainer, and forcible detainer not later than two years after the day the cause of
action accrues
11/05/2024 1:06 AM
PROMULGATED CONTRACTS Exam
Questions With Correct Answers
Contract: - answer✔A legally binding and enforceable agreement to do or not to do a specific thing
Promulgated Contract: - answer✔A contract that has been approved and is required to be used by
license holders
In Texas, what are the two entities that promulgate contracts? - answer✔TREC and TAR
In a real estate sale, the license holder must use the appropriate TREC-promulgated form UNLESS
another contract form is required by the buyer's lender. - answer✔FALSE
(Explanation: In a real estate sale, the license holder must use the appropriate TREC-promulgated form
UNLESS another contract form is required by the property owner. The buyer's lender has no influence
over the sales contracts used in a transaction.)
A license holder should ___________. - answer✔disclose all material facts to the client
Legally Competent: - answer✔When an individual has reached the age of majority (18 years of age) and
has not been declared mentally incompetent by a judge
Void Contract: - answer✔A contract that has no legal effect
Voidable Contract: - answer✔When one or more of the parties has the authority to rescind the contract
Consideration: - answer✔A valuable item that each party exchanges in order to demonstrate that they
agree to the contract terms
Which of the following is TRUE of mutual agreement? - answer✔There cannot be mistakes in the terms
and conditions
All of the following are essential elements of a valid contract EXCEPT: - answer✔earnest money
What is NOT an element of a valid contract? - answer✔earnest money
A law that requires real estate contracts to be in writing is the ______. - answer✔statute of Frauds
Valid Contract: - answer✔Legal agreement meeting all the essential, basic requirements of the law
, ©THEBRIGHT EXAM SOLUTIONS
11/05/2024 1:06 AM
Unenforceable Contract: - answer✔A contract that cannot be enforced by the courts
5 essential elements of a valid contract: - answer✔1.Mutual assent (100% agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
If two people have a contract for one to sell illegal drugs to the other, the contract would be: -
answer✔Void
A contract that cannot be enforced by the courts is _____. - answer✔unenforceable
Executory Contract: - answer✔A contract that is not completely executed or performed
Executed Contract: - answer✔A contract in which all terms have been fulfilled by all parties
A contract that is "pending" is __________________. - answer✔executory
The difference between an executory contract and an executed contract is that the executed contract is
_____. - answer✔closed
The best way for any contract to terminate is to become _________________. - answer✔executed
According to Texas state law, a contract for deed and a lease with an option to buy are considered
___________. - answer✔executory contracts
Bilateral Contract: - answer✔A contract in which one party must promise to do something for another
party and that party must promise to do something for the first party
Unilateral Contract: - answer✔A contract made between two or more parties in which only one of those
parties makes a promise or otherwise accepts an obligation
An option to buy contract is a(n)_________________. - answer✔Unilateral Contract
Which of the following is a bilateral contract? - answer✔leases
If a contract says "time is of the essence," that means that it is due: - answer✔as soon as possible
By whom should the language "time of the essence" be added? - answer✔an attorney
Addenda: - answer✔Materials added to and included in the initial contract that provide more
information on the transaction
, ©THEBRIGHT EXAM SOLUTIONS
11/05/2024 1:06 AM
Amendment: - answer✔Items that are attached to the original document and should never be changed
after the document has been signed and accepted
When filling out the nine checkable box options on the Amendment to Contract form, more than one
box can be checked. - answer✔TRUE
In which situation would an amendment go into effect? - answer✔the parties sign to amendment
TREC promulgated addenda are added to the contract AFTER it has been signed. - answer✔FALSE
(Explanation: Addenda are added to the contract BEFORE the contract has been signed. Amendments
are added afterwards.)
Performance: - answer✔The responsibility of all the parties to carry out their part of a contract
Quitclaim Deed: - answer✔Transfers ownership of whatever the grantor owns but make no guarantee of
ownership and no promise to defend
Novation: - answer✔The substitution of a new contract for an existing contract, relieves the original
party of liability
Obligations often times must be completed within a certain number of days of _____. - answer✔the
effective date
If one of the parties defaults and the non-defaulting party accepts the earnest money as damages, they
may also: - answer✔Do nothing more, as the contract is terminated.
To transfer contract obligations without necessarily relieving the original party from obligations, you
need a(n) __________. - answer✔assignment
Statute of Limitation: - answer✔A law establishing a time limit for civil suits
The Doctrine of Laches is the same thing as the Statutes of Limitations. - answer✔FALSE
(Explanation: The Doctrine of Laches is based on common law, while Statutes of Limitations are written
and codified.)
One-Year Limitation Period: - answer✔Malicious prosecution, libel, slander, or breach of promise of
marriage not later than one year after the day the cause of action accrues
Two-Year Limitation Period: - answer✔Trespass for injury to the estate or to the property of another,
conversion of personal property, taking or detaining the personal property of another, personal injury,
forcible entry and detainer, and forcible detainer not later than two years after the day the cause of
action accrues
