Law of Contracts - Champions Test: Questions & Answers
The TREC residential contract forms are: - ANSWER:Drafted by the Broker Lawyer Committee
Wrongful or criminal deception intended to result in financial or personal gain is called: - ANSWER:fraud
Under the Deceptive Trade Practices Act, __________ are defined as tangible chattels. - ANSWER:goods
If a seller will continue to occupy the property for one month after the closing, the buyer and seller
should: - ANSWER:Enter into a Seller's Temporary Residential Lease
The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: -
ANSWER:90 days
a seller's disclosure notice is not required - ANSWER:at a foreclosure sale
The type of law that deals with the relationship between the parties to a transaction, sales agents and
brokers is: - ANSWER:agency law
__________ is the body of laws and regulations enacted by federal and state legislative bodies. -
ANSWER:statutory law
__________ extend above the surface without limitation. - ANSWER:air rights
Any man-made addition to land that is permanent, and is considered to become part of the land is
known as a(n) __________. - ANSWER:improvement
A(n) __________ is an entity created for the benefit of another. - ANSWER:trust
an option contract is: - ANSWER:unilateral contract
__________ is not a requirement of a valid contract. - ANSWER:earnest money
If a person has been judged to be incompetent, a contract is __________ because the person never had
the capacity to enter into a contract in the first place. - ANSWER:void
The five essential elements of a valid and enforceable contract are, Consideration, Offer and Acceptance,
Legal purpose, In writing and __________. - ANSWER:competent parties
A(n) __________ is an agreement between two or more parties to do something or to refrain from doing
something. - ANSWER:contract
When an individual owns real property, he or she is said to have a (n) __________ in that property. -
ANSWER:freehold estate
If property violates zoning, the owners must request a __________, which is permission to violate the
rules. - ANSWER:variance
An example(s) of an appurtenance would be: - ANSWER:easements
There is no upper limit on the value of a Texas homestead. - ANSWER:true
, A(n) __________ is an area of land separating one land use from another. - ANSWER:buffer zone
The French term __________ means a life estate that is based on the life of another. - ANSWER:pur autre
vie
In a residential lease with a "right of first refusal" provision: - ANSWER:The tenant has the right to match
or better any offer the landlord receives to prevent the property from being sold to someone else
A __________ is an employment agreement between the seller and the broker. - ANSWER:listing
agreement
A(n) __________ is one that combines some of the elements of a sale with a lease. - ANSWER:lease
purchase agreement
Prior to closing, severe damage to or destruction of a property under contract: - ANSWER:Can result in
termination of the contract
The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and
__________. - ANSWER:open listing
In a __________ lease, the tenant's rent is based, in whole or in part, on the receipts of his or her
business. - ANSWER:percentage lease
A(n) __________ is a type of seller financing wherein the owner retains title to the property while the
purchaser takes possession of the premises and pays on the principal. - ANSWER:contract for deed
Which of the following requires a contract for the conveyance of real estate to be in writing to be
enforceable? - ANSWER:statute of frauds
If a broker receives more than one offer on a property: - ANSWER:All must be presented to the seller
unless the seller has instructed the broker otherwise
a counteroffer is: - ANSWER:a rejection, a new offer, able to be withdrawn prior to acceptance
A seller choosing to receive a buyer's earnest money after the buyer defaults on a contract is an example
of: - ANSWER:liquidated damages
The most common form of financing used by buyers is: - ANSWER:third party financing
The Special Provisions paragraph of the contract allows license holders to insert: - ANSWER:Factual
business details, Statements not addressed in the contract, Information for which there is no TREC-
promulgated addendum, lease or mandatory form
An offer by a prospective purchaser can be terminated prior to acceptance due to: - ANSWER:expiration
of a specified time period, bankruptcy of either party, a change in the law that renders the contract
illegal
A(n) __________ is a provision in a contract that requires that a certain act or event happens in order for
the contract to be binding on the party. - ANSWER:contingency
The Lead-Based Paint Disclosure is: - ANSWER:A federal requirement for residential property built prior
to 1978
The TREC residential contract forms are: - ANSWER:Drafted by the Broker Lawyer Committee
Wrongful or criminal deception intended to result in financial or personal gain is called: - ANSWER:fraud
Under the Deceptive Trade Practices Act, __________ are defined as tangible chattels. - ANSWER:goods
If a seller will continue to occupy the property for one month after the closing, the buyer and seller
should: - ANSWER:Enter into a Seller's Temporary Residential Lease
The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: -
ANSWER:90 days
a seller's disclosure notice is not required - ANSWER:at a foreclosure sale
The type of law that deals with the relationship between the parties to a transaction, sales agents and
brokers is: - ANSWER:agency law
__________ is the body of laws and regulations enacted by federal and state legislative bodies. -
ANSWER:statutory law
__________ extend above the surface without limitation. - ANSWER:air rights
Any man-made addition to land that is permanent, and is considered to become part of the land is
known as a(n) __________. - ANSWER:improvement
A(n) __________ is an entity created for the benefit of another. - ANSWER:trust
an option contract is: - ANSWER:unilateral contract
__________ is not a requirement of a valid contract. - ANSWER:earnest money
If a person has been judged to be incompetent, a contract is __________ because the person never had
the capacity to enter into a contract in the first place. - ANSWER:void
The five essential elements of a valid and enforceable contract are, Consideration, Offer and Acceptance,
Legal purpose, In writing and __________. - ANSWER:competent parties
A(n) __________ is an agreement between two or more parties to do something or to refrain from doing
something. - ANSWER:contract
When an individual owns real property, he or she is said to have a (n) __________ in that property. -
ANSWER:freehold estate
If property violates zoning, the owners must request a __________, which is permission to violate the
rules. - ANSWER:variance
An example(s) of an appurtenance would be: - ANSWER:easements
There is no upper limit on the value of a Texas homestead. - ANSWER:true
, A(n) __________ is an area of land separating one land use from another. - ANSWER:buffer zone
The French term __________ means a life estate that is based on the life of another. - ANSWER:pur autre
vie
In a residential lease with a "right of first refusal" provision: - ANSWER:The tenant has the right to match
or better any offer the landlord receives to prevent the property from being sold to someone else
A __________ is an employment agreement between the seller and the broker. - ANSWER:listing
agreement
A(n) __________ is one that combines some of the elements of a sale with a lease. - ANSWER:lease
purchase agreement
Prior to closing, severe damage to or destruction of a property under contract: - ANSWER:Can result in
termination of the contract
The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and
__________. - ANSWER:open listing
In a __________ lease, the tenant's rent is based, in whole or in part, on the receipts of his or her
business. - ANSWER:percentage lease
A(n) __________ is a type of seller financing wherein the owner retains title to the property while the
purchaser takes possession of the premises and pays on the principal. - ANSWER:contract for deed
Which of the following requires a contract for the conveyance of real estate to be in writing to be
enforceable? - ANSWER:statute of frauds
If a broker receives more than one offer on a property: - ANSWER:All must be presented to the seller
unless the seller has instructed the broker otherwise
a counteroffer is: - ANSWER:a rejection, a new offer, able to be withdrawn prior to acceptance
A seller choosing to receive a buyer's earnest money after the buyer defaults on a contract is an example
of: - ANSWER:liquidated damages
The most common form of financing used by buyers is: - ANSWER:third party financing
The Special Provisions paragraph of the contract allows license holders to insert: - ANSWER:Factual
business details, Statements not addressed in the contract, Information for which there is no TREC-
promulgated addendum, lease or mandatory form
An offer by a prospective purchaser can be terminated prior to acceptance due to: - ANSWER:expiration
of a specified time period, bankruptcy of either party, a change in the law that renders the contract
illegal
A(n) __________ is a provision in a contract that requires that a certain act or event happens in order for
the contract to be binding on the party. - ANSWER:contingency
The Lead-Based Paint Disclosure is: - ANSWER:A federal requirement for residential property built prior
to 1978
