Texas Law of Contracts Exam Study Guide: Questions &
Answers
It is not the unauthorized practice of law by a license holder to complete a contract form binding the
sale, exchanged, lease or rental of an interest in real property has been prepared by and required by -
ANSWER:the property owner
The Broker-Lawyer Committee drafts but does not? - ANSWER:publish forms for mandatory use by
licensees
The difference between a TREC promulgated form and a TREC approved form is? - ANSWER:promulgated
forms must be used, while approved forms may be used
Under the Deceptive Trade Practices Act (DTPA), if a real estate professional knowingly deceives a client -
ANSWER:treble damages will be awarded to the injured party
A sewer system is not included in? - ANSWER:the description of the land
In the sale of real estate, personal property that is to remain is addressed in - ANSWER:an addendum
A manufactured house can be considered real property if the owner chooses to - ANSWER:treat it as
such and files the proper paperwork
Indestructibility is a physical characteristic of - ANSWER:land
In one of the owners dies as a joint tenant, his property passes to - ANSWER:the surviving owner
immediately
When one party in a joint tenancy dies, the deceased tenant's interest in the property transfers directly
to - ANSWER:the surviving joint tenant(s).
Community property cannot be mortgaged or conveyed by - ANSWER:one spouse without the consent
of the other
A business organization may not own property as a - ANSWER:tenancy by the entirety
Fee simple ownership shared walls, and a fractional interest in common areas are all characteristics of -
ANSWER:town house ownership
A seller promises to sell his house and transfer title to the buyer, who promises to pay $250,000 for the
house. This is an example of - ANSWER:a bilateral contract
During the period after a real estate sales contract is signed, but before title actually passes, the status of
the contract is - ANSWER:executory
The buyer and the seller have an executory contract for the sale of a property. The seller has assured the
buyer that the property can be used as a home daycare center. The buyer checked zoning and discovered
that the special use is no longer lawful in that neighborhood. In this case, the contract is - ANSWER:void
, A voidable contract may be dis-affirmed by - ANSWER:one party
A contract to perform an unlawful act is - ANSWER:considered void
Assignment transfers contract obligations to another party but does not necessarily release the -
ANSWER:first party's obligation
A tenant received a job offer in another state and requested that the landlord allow her friend to take
over her lease. The landlord agrees to allow the first tenant to sublet the apartment. This is an example
of - ANSWER:assignment
A buyer is under contract to buy property and is now being relocated. This friend offers to buy the
property instead. If the purchase contract allows, his friend can take over the buyer's contract rights by -
ANSWER:assignment
It is not a breach of contract if a licensee is unable to find a ready, willing, and able buyer for -
ANSWER:the seller.
After agreeing on a sales price and signing a contract, the buyer lost his job. The sellers decided they
wanted to stay in the house after all, and the parties decided to terminate the contract. This is an
example of - ANSWER:mutual agreement
The statute of limitations for breach of a written contract is - ANSWER:four years
Failing to perform as agreed in a contract is - ANSWER:default
Unlike a sales contract, a listing agreement is an - ANSWER:employment contract
Information needed for a listing agreement generally includes size, type, age, and construction of the
house, and required disclosures regarding - ANSWER:property conditions
The seller can provide the written disclosure of property condition to the buyer after the agreement is
signed, but this gives the buyer the right to terminate the contract within 7 days after the -
ANSWER:receipt of the disclosure
Listing agreements and buyer agency contracts are - ANSWER:employment contracts
Estate for years, estate from period to period, and estate at will are all examples of - ANSWER:leasehold
estates
A lease will be valid if it is between a landlord and a 44-year-old woman who uses a wheelchair to -
ANSWER:get around
During the period after a real estate sales contract is accepted but before the delivery of the deed, the
status of the contract is - ANSWER:executory
A contract for deed or installment contract is a method of selling real estate where the seller is -
ANSWER:also the lender
An option to purchase contract allows the buyer to buy for a fixed price within a - ANSWER:specified
time periods
Answers
It is not the unauthorized practice of law by a license holder to complete a contract form binding the
sale, exchanged, lease or rental of an interest in real property has been prepared by and required by -
ANSWER:the property owner
The Broker-Lawyer Committee drafts but does not? - ANSWER:publish forms for mandatory use by
licensees
The difference between a TREC promulgated form and a TREC approved form is? - ANSWER:promulgated
forms must be used, while approved forms may be used
Under the Deceptive Trade Practices Act (DTPA), if a real estate professional knowingly deceives a client -
ANSWER:treble damages will be awarded to the injured party
A sewer system is not included in? - ANSWER:the description of the land
In the sale of real estate, personal property that is to remain is addressed in - ANSWER:an addendum
A manufactured house can be considered real property if the owner chooses to - ANSWER:treat it as
such and files the proper paperwork
Indestructibility is a physical characteristic of - ANSWER:land
In one of the owners dies as a joint tenant, his property passes to - ANSWER:the surviving owner
immediately
When one party in a joint tenancy dies, the deceased tenant's interest in the property transfers directly
to - ANSWER:the surviving joint tenant(s).
Community property cannot be mortgaged or conveyed by - ANSWER:one spouse without the consent
of the other
A business organization may not own property as a - ANSWER:tenancy by the entirety
Fee simple ownership shared walls, and a fractional interest in common areas are all characteristics of -
ANSWER:town house ownership
A seller promises to sell his house and transfer title to the buyer, who promises to pay $250,000 for the
house. This is an example of - ANSWER:a bilateral contract
During the period after a real estate sales contract is signed, but before title actually passes, the status of
the contract is - ANSWER:executory
The buyer and the seller have an executory contract for the sale of a property. The seller has assured the
buyer that the property can be used as a home daycare center. The buyer checked zoning and discovered
that the special use is no longer lawful in that neighborhood. In this case, the contract is - ANSWER:void
, A voidable contract may be dis-affirmed by - ANSWER:one party
A contract to perform an unlawful act is - ANSWER:considered void
Assignment transfers contract obligations to another party but does not necessarily release the -
ANSWER:first party's obligation
A tenant received a job offer in another state and requested that the landlord allow her friend to take
over her lease. The landlord agrees to allow the first tenant to sublet the apartment. This is an example
of - ANSWER:assignment
A buyer is under contract to buy property and is now being relocated. This friend offers to buy the
property instead. If the purchase contract allows, his friend can take over the buyer's contract rights by -
ANSWER:assignment
It is not a breach of contract if a licensee is unable to find a ready, willing, and able buyer for -
ANSWER:the seller.
After agreeing on a sales price and signing a contract, the buyer lost his job. The sellers decided they
wanted to stay in the house after all, and the parties decided to terminate the contract. This is an
example of - ANSWER:mutual agreement
The statute of limitations for breach of a written contract is - ANSWER:four years
Failing to perform as agreed in a contract is - ANSWER:default
Unlike a sales contract, a listing agreement is an - ANSWER:employment contract
Information needed for a listing agreement generally includes size, type, age, and construction of the
house, and required disclosures regarding - ANSWER:property conditions
The seller can provide the written disclosure of property condition to the buyer after the agreement is
signed, but this gives the buyer the right to terminate the contract within 7 days after the -
ANSWER:receipt of the disclosure
Listing agreements and buyer agency contracts are - ANSWER:employment contracts
Estate for years, estate from period to period, and estate at will are all examples of - ANSWER:leasehold
estates
A lease will be valid if it is between a landlord and a 44-year-old woman who uses a wheelchair to -
ANSWER:get around
During the period after a real estate sales contract is accepted but before the delivery of the deed, the
status of the contract is - ANSWER:executory
A contract for deed or installment contract is a method of selling real estate where the seller is -
ANSWER:also the lender
An option to purchase contract allows the buyer to buy for a fixed price within a - ANSWER:specified
time periods
