LAW OF CONTRACTS PRACTICE EXAM
(ACTUAL 2025) CHAMPIONS 100% VERIFIED
CORRECT
In ______the Texas Real Estate Commission was established
to administer and enforce the TRELA.
a. 1939
b. 1929
c. 1949
d. 1993
c. 1949
Which of the following occurs when a new contract is
substituted for an existing one?
(a) Switch
(b) Breach of contract
(c) Assignment
(d) Novation
(d) Novation
,A _______ is also known as an option contract where only
one party is obligated to perform.
(a) A bilateral contract
(b) Binding on both parties
(c) A unilateral contract
(d) Illegal in Texas
(c) A unilateral contract
Which of the following is not a requirement of a valid
contract?
(a) Mutual consent
(b) Consideration
(c) Earnest Money
(d) Legal purpose
(c) Earnest Money
Because they are considered an abusive practice, _________
are prohibited by RESPA.
(a) temporary loans
(b) refinance transactions
,(c) kickbacks
(d) controlled business arrangements
(c) kickbacks
Transactions considered exempt from RESPA include which
of the following?
(a) Government loans
(b) Home equity loans
(c) Business loans
(d) Manufactured home loans
(c) Business loans
Questions 1-4 are based on the following scenario: Malcolm,
a buyers' agent, has learned that his client's offer has been
accepted and the contract has been executed. Two days later,
on a Friday, Malcolm is busy showing houses and is trying to
arrange a time to give the option fee directly to Susan, the
listing agent, to avoid driving to her office on the other side of
town. Susan gives Malcolm two suggestions. He can leave the
option fee at XYZ Title Company when he drops off the
earnest money check, or he can meet up with Susan on
Sunday to give her the check.
, 1. Is it a good idea for Malcolm to drop off the option fee at
the title company? Why or why not?
(a) No because the contract stipulates that the option fee will
be delivered to the seller.
(b) Yes, submitting the option fee directly to the title company
ensures that it is recorded and date stamped, so there will be
no room for questions.
(c) It is only a good idea to leave the option fee with the title
company when they have a long-standing relationship with
the listing agent.
(d) Yes, it is only permissible to leave the option fee at the
title company when the listing agent or the seller has
expressed permission to do so.
(a) No because the contract stipulates that the option fee will
be delivered to the seller.
Questions 1-4 are based on the following scenario: Malcolm,
a buyers' agent, has learned that his client's offer has been
accepted and the contract has been executed. Two days later,
on a Friday, Malcolm is busy showing houses and is trying to
arrange a time to give the option fee directly to Susan, the
listing agent, to avoid driving to her office on the other side of
town. Susan gives Malcolm two suggestions. He can leave the
option fee at XYZ Title Company when he drops off the
(ACTUAL 2025) CHAMPIONS 100% VERIFIED
CORRECT
In ______the Texas Real Estate Commission was established
to administer and enforce the TRELA.
a. 1939
b. 1929
c. 1949
d. 1993
c. 1949
Which of the following occurs when a new contract is
substituted for an existing one?
(a) Switch
(b) Breach of contract
(c) Assignment
(d) Novation
(d) Novation
,A _______ is also known as an option contract where only
one party is obligated to perform.
(a) A bilateral contract
(b) Binding on both parties
(c) A unilateral contract
(d) Illegal in Texas
(c) A unilateral contract
Which of the following is not a requirement of a valid
contract?
(a) Mutual consent
(b) Consideration
(c) Earnest Money
(d) Legal purpose
(c) Earnest Money
Because they are considered an abusive practice, _________
are prohibited by RESPA.
(a) temporary loans
(b) refinance transactions
,(c) kickbacks
(d) controlled business arrangements
(c) kickbacks
Transactions considered exempt from RESPA include which
of the following?
(a) Government loans
(b) Home equity loans
(c) Business loans
(d) Manufactured home loans
(c) Business loans
Questions 1-4 are based on the following scenario: Malcolm,
a buyers' agent, has learned that his client's offer has been
accepted and the contract has been executed. Two days later,
on a Friday, Malcolm is busy showing houses and is trying to
arrange a time to give the option fee directly to Susan, the
listing agent, to avoid driving to her office on the other side of
town. Susan gives Malcolm two suggestions. He can leave the
option fee at XYZ Title Company when he drops off the
earnest money check, or he can meet up with Susan on
Sunday to give her the check.
, 1. Is it a good idea for Malcolm to drop off the option fee at
the title company? Why or why not?
(a) No because the contract stipulates that the option fee will
be delivered to the seller.
(b) Yes, submitting the option fee directly to the title company
ensures that it is recorded and date stamped, so there will be
no room for questions.
(c) It is only a good idea to leave the option fee with the title
company when they have a long-standing relationship with
the listing agent.
(d) Yes, it is only permissible to leave the option fee at the
title company when the listing agent or the seller has
expressed permission to do so.
(a) No because the contract stipulates that the option fee will
be delivered to the seller.
Questions 1-4 are based on the following scenario: Malcolm,
a buyers' agent, has learned that his client's offer has been
accepted and the contract has been executed. Two days later,
on a Friday, Malcolm is busy showing houses and is trying to
arrange a time to give the option fee directly to Susan, the
listing agent, to avoid driving to her office on the other side of
town. Susan gives Malcolm two suggestions. He can leave the
option fee at XYZ Title Company when he drops off the
