©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 9:46 AM A+
Texas Promulgated Contracts Exam
Questions And Answers |Latest 2025 |
Guaranteed Pass
According to the Addendum for "Back-Up" Contract, when must the option money be paid? -
Answer✔Upon execution
Real Estate Dealer's License Act (REDLA) - Answer✔Passed in 1939, it required real estate
agents to obtain licenses. It was changed to the Texas Real Estate License Act in 1949
True or False: The seller would be the party of the first part and the buyer would be the party of
the second part. Any salesperson would be considered a third party and regulated by the
commission. - Answer✔True
contract - Answer✔A legal agreement between parties to do (performance) or not to do
(forbearance) a certain act for consideration.
Four elements of a contract: - Answer✔Agreement
Consideration
Competent parties
Legal objective
A contract for the purchase of ____________________ must be in writing to be enforceable. -
Answer✔real estate
1
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 9:46 AM A+
Contract law is based on the principle expressed in the Latin phrase "pacta sunt servanda"
loosely translated to ______________________. - Answer✔"agreements are to be kept"
To be of legal age in Texas, a person must be __________________, unless in the military or
married. - Answer✔18 or older
True or False: A licensee should never try to make a determination if a person is drunk or on
drugs. The licensee could ask but could not deny the person if they wanted to write an offer.
This could put the licensee in the position of violating the Federal Fair Housing Act or be a
breach of his or her agency duties to the client. - Answer✔True
The Texas Real Estate Commission regulates a licensee __________________. - Answer✔In
transactions in which the licensee is acting in a third-party position.
Mutual assent - Answer✔agreement to ALL the terms by ALL the parties
The contract cannot contain: - Answer✔Misrepresentation - an error
Fraud - intentional misrepresentation
Duress - use of force
Menace - threat of violence
Undue Influence - use of power
Consideration - Answer✔something in exchange for something else
Two types of consideration: - Answer✔1. Valuable consideration (something of value)
2. Good consideration (love and affection)
True or False: Consideration must not be from the past - Answer✔True
2
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 9:46 AM A+
Assignment - Answer✔One of the parties to a contract may choose to assign the contract to a
third individual. For example, a law enforcement officer does not want his or her name to
appear in the public records so that the criminals can shoot up his or her residence. For this
reason, the police officer may create a family trust before the closing and with assignment pass
the title on to that trust. No one, then, could locate the officer's home based upon a search of
the public records.
Novation - Answer✔In this situation, the buyer and the seller had an existing agreement and
then because of additional information such as a home inspector's report, new negotiations are
entered into. The two parties wind up changing so much on the original document, it is easier
to write a new contract and put it in the place of the old one. The parties stay the same; it is
just that now they have a new agreement.
Open discussion - Answer✔Is needed during a disagreement and usually involves the parties
sitting down with the broker and discussing the situation.
Mediation - Answer✔the third party mediator is simply a facilitator attempting to keep both
parties talking until they can reach a solution. Mediation is non-binding
Arbitration - Answer✔The arbitrator listens to both sides of the situation and makes a decision.
His or her decision is binding and court action cannot be pursued.
Litigation - Answer✔Is going to court and usually involves attorneys and research. Litigation is
almost always the most costly route and involves the greatest time consumption.
An impartial third party appointed for dispute resolution services by a court or a governmental
body must have the following qualifications: - Answer✔- 40 classroom hours of approved
training in dispute resolution techniques
- for parent-child disputes, an additional 24 hours training in the fields of family dynamics, child
development, and family law
Texas Mediator Credentialing Committee - Answer✔A coalition of Texas mediator
organizations, has a voluntary credentialing program
3
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 9:46 AM A+
State of Texas requirements for arbitrator: - Answer✔- must obtain a law degree or a master's
degree in law, public policy or a related field
- should focus on developing dispute-resolution methods, writing skills and listening skills in his
or her education
- arbitrator student should consider furthering his or her education by enrolling in an
independent mediator course
The _______________________ requires that all documents pertaining to the transfer of real
estate from one person to another must be in writing to be enforceable. - Answer✔Texas
Statute of Frauds
True or False: The Statute of Frauds does not prohibit verbal contracts; it just makes some of
them unenforceable. - Answer✔True
Recording Acts - Answer✔Texas laws require that any claim, interest, or ownership in real
estate be placed in the public records in the county where the property is located.
Duress - Answer✔Using some type of force to make a person agree to a contract
Valid contract - Answer✔A contract that is is legally binding and enforceable
A contract is valid when all of these conditions are met: - Answer✔The written agreement is
legal
Every item is completely agreed to
The buyer and seller are sane and of the correct legal age
There is nothing in the document that is illegal or against public policy
All of the essential elements to a contract are included in the document
The point of a contract is to: - Answer✔clearly outline an agreement so the object of the
contract is accomplished while preventing a disagreement of terms
4
Texas Promulgated Contracts Exam
Questions And Answers |Latest 2025 |
Guaranteed Pass
According to the Addendum for "Back-Up" Contract, when must the option money be paid? -
Answer✔Upon execution
Real Estate Dealer's License Act (REDLA) - Answer✔Passed in 1939, it required real estate
agents to obtain licenses. It was changed to the Texas Real Estate License Act in 1949
True or False: The seller would be the party of the first part and the buyer would be the party of
the second part. Any salesperson would be considered a third party and regulated by the
commission. - Answer✔True
contract - Answer✔A legal agreement between parties to do (performance) or not to do
(forbearance) a certain act for consideration.
Four elements of a contract: - Answer✔Agreement
Consideration
Competent parties
Legal objective
A contract for the purchase of ____________________ must be in writing to be enforceable. -
Answer✔real estate
1
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 9:46 AM A+
Contract law is based on the principle expressed in the Latin phrase "pacta sunt servanda"
loosely translated to ______________________. - Answer✔"agreements are to be kept"
To be of legal age in Texas, a person must be __________________, unless in the military or
married. - Answer✔18 or older
True or False: A licensee should never try to make a determination if a person is drunk or on
drugs. The licensee could ask but could not deny the person if they wanted to write an offer.
This could put the licensee in the position of violating the Federal Fair Housing Act or be a
breach of his or her agency duties to the client. - Answer✔True
The Texas Real Estate Commission regulates a licensee __________________. - Answer✔In
transactions in which the licensee is acting in a third-party position.
Mutual assent - Answer✔agreement to ALL the terms by ALL the parties
The contract cannot contain: - Answer✔Misrepresentation - an error
Fraud - intentional misrepresentation
Duress - use of force
Menace - threat of violence
Undue Influence - use of power
Consideration - Answer✔something in exchange for something else
Two types of consideration: - Answer✔1. Valuable consideration (something of value)
2. Good consideration (love and affection)
True or False: Consideration must not be from the past - Answer✔True
2
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 9:46 AM A+
Assignment - Answer✔One of the parties to a contract may choose to assign the contract to a
third individual. For example, a law enforcement officer does not want his or her name to
appear in the public records so that the criminals can shoot up his or her residence. For this
reason, the police officer may create a family trust before the closing and with assignment pass
the title on to that trust. No one, then, could locate the officer's home based upon a search of
the public records.
Novation - Answer✔In this situation, the buyer and the seller had an existing agreement and
then because of additional information such as a home inspector's report, new negotiations are
entered into. The two parties wind up changing so much on the original document, it is easier
to write a new contract and put it in the place of the old one. The parties stay the same; it is
just that now they have a new agreement.
Open discussion - Answer✔Is needed during a disagreement and usually involves the parties
sitting down with the broker and discussing the situation.
Mediation - Answer✔the third party mediator is simply a facilitator attempting to keep both
parties talking until they can reach a solution. Mediation is non-binding
Arbitration - Answer✔The arbitrator listens to both sides of the situation and makes a decision.
His or her decision is binding and court action cannot be pursued.
Litigation - Answer✔Is going to court and usually involves attorneys and research. Litigation is
almost always the most costly route and involves the greatest time consumption.
An impartial third party appointed for dispute resolution services by a court or a governmental
body must have the following qualifications: - Answer✔- 40 classroom hours of approved
training in dispute resolution techniques
- for parent-child disputes, an additional 24 hours training in the fields of family dynamics, child
development, and family law
Texas Mediator Credentialing Committee - Answer✔A coalition of Texas mediator
organizations, has a voluntary credentialing program
3
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 9:46 AM A+
State of Texas requirements for arbitrator: - Answer✔- must obtain a law degree or a master's
degree in law, public policy or a related field
- should focus on developing dispute-resolution methods, writing skills and listening skills in his
or her education
- arbitrator student should consider furthering his or her education by enrolling in an
independent mediator course
The _______________________ requires that all documents pertaining to the transfer of real
estate from one person to another must be in writing to be enforceable. - Answer✔Texas
Statute of Frauds
True or False: The Statute of Frauds does not prohibit verbal contracts; it just makes some of
them unenforceable. - Answer✔True
Recording Acts - Answer✔Texas laws require that any claim, interest, or ownership in real
estate be placed in the public records in the county where the property is located.
Duress - Answer✔Using some type of force to make a person agree to a contract
Valid contract - Answer✔A contract that is is legally binding and enforceable
A contract is valid when all of these conditions are met: - Answer✔The written agreement is
legal
Every item is completely agreed to
The buyer and seller are sane and of the correct legal age
There is nothing in the document that is illegal or against public policy
All of the essential elements to a contract are included in the document
The point of a contract is to: - Answer✔clearly outline an agreement so the object of the
contract is accomplished while preventing a disagreement of terms
4
