AYPO - TEXAS - PRINCIPLES OF REAL
ESTATE 1 QUESTIONS AND VERIFIED
ANSWERS
D. The offeree ANSW✅✅Who is the person or business entity receiving an offer?
A. The court
B. The contractor
C. The offeror
D. The offeree
D. The broker's commission and broker fees ANSW✅✅Which of the following is/are elements
that will be found in nearly every kind of listing agreement?
A. Complete or partial list of properties the buyer is considering.
B. All of these are included in nearly every kind of listing agreement
C. A checklist of confidential information that seller either does or does not want revealed to
potential buyers
D. The broker's commission and broker fees
D. enforceable ANSW✅✅A contract must have a legal purpose in order to be:
A. a promise
B. intentional
C. competent
D. enforceable
D. a rejection of the original offer ANSW✅✅A counteroffer is:
A. unenforceable
B. a default of the original offer
C. acceptance of the original offer
D. a rejection of the original offer
,D. Specific performance. ANSW✅✅What is the remedy called when one party has made a good
faith effort to perform his/her obligations under a contract and the other party has NOT performed
his/her obligations?
A. None of these answers are correct.
B. Tortious interference.
C. Substantial performance.
D. Specific performance.
B. All of these are potential contract clauses. ANSW✅✅Which of these IS NOT a potential contract
clause?
A. Arbitration
B. All of these are potential contract clauses.
C. Escape
D. Severability
D. An indemnification clause ANSW✅✅What states that a party, or parties, associated with a
contract will cover certain losses or expenses incurred by another party under the contract?
A. An escape clause
B. A severability clause
C. A "time is of the essence" clause
D. An indemnification clause
B. Material breach. ANSW✅✅What causes great harm or substantially lessens the value of the
contract for the non-breaching party?
A. Repudiation.
B. Material breach.
C. Fraud.
D. Immaterial breach.
D. Rescission and restitution. ANSW✅✅What returns the nonbreaching party to the position he
or she would have been in if the contract had not been made?
A. Cancellation.
B. Liquidated damages.
,C. Specific performance.
D. Rescission and restitution.
D. Inconvenience ANSW✅✅Which of these IS NOT a defense to breach of contract?
A. Illegality
B. Impossibility
C. Impracticability
D. Inconvenience
d. monetary benefit
Requirements for Validity To form a legally enforceable contract, the following basic elements are
necessary: Parties with legal capacity An offerA valid (legal) purposeConsiderationAn acceptance of
the exact terms of the offer ANSW✅✅Which of these IS NOT a required element of a contract?
a. mutual acceptance
b. consideration
c. legal capacity
d. monetary benefit
a. Estoppel
Estoppel is a legal prohibition which precludes a person from asserting or denying a fact or which
precludes a person from exercising a specific right, such as the right to additional lawsuits.
ANSW✅✅_________________ is a legal prohibition which precludes a person from asserting or
denying a fact or which precludes a person from exercising a specific right, such as the right to
additional lawsuits.
a. Estoppel
b. Fraud
c. Covenant
d. Mitigation
a. Novation
Novation involves changing fundamental aspects of a contract in such a way that the contract is
replaced with a new version that reflects the changes. In other words, novation is the renewal or
replacement of a contract. ANSW✅✅_______________ involves changing fundamental aspects of
a contract in such a way that the contract is replaced with a new version that reflects the changes.
, a. Novation
b. Assignment
c. Mitigation
d. Assumption
Scenario ANSW✅✅Gabe, a licensed broker in Texas, has an oral agreement to represent 17-year-
old Iris in the sale of a home she has inherited. He has not asked for any form of compensation for
his assistance. They search for a buyer. One week after Iris's 18th birthday, an agent approaches
Gabe with a potential buyer. Gabe relays the information to Iris and negotiates a fee/commission
agreement with her. He presents the offer to her along with a copy of the IABS. One week before
closing, Gabe decides that he and Iris need to place their agreement in writing, and the sale
proceeds.
c. No, their agreement lacks consideration for Gabe and legal capacity for Iris. ANSW✅✅1. Do
Gabe and Iris have a binding contract at the start of their relationship?
a. No, but only because it is not in writing.
b. Yes, but they need to reduce it to writing as soon as possible.
c. No, their agreement lacks consideration for Gabe and legal capacity for Iris.
d. Yes, they have effectively created an oral agreement
d. No, a contract regarding a real property transaction must be in writing. ANSW✅✅2. Once Iris
turns 18 and agrees to compensate Gabe for his efforts, do they have a valid contract for a
transaction in real property?
a. Yes, because the previous flaws have been corrected.
b. Yes, they now have a binding real property contract.
c. No, because they have not been specific enough as to what Gabe will receive, so there is
insufficient consideration.
d. No, a contract regarding a real property transaction must be in writing.
a. Statute of Frauds ANSW✅✅3. The underlying law requiring that all real property transactions
(among many other forms of contracts) being made in writing is called the:
a. Statute of Frauds
b. Statute of Contracts
c. Truth In Buying Act
d. Real estate in writing clause.
ESTATE 1 QUESTIONS AND VERIFIED
ANSWERS
D. The offeree ANSW✅✅Who is the person or business entity receiving an offer?
A. The court
B. The contractor
C. The offeror
D. The offeree
D. The broker's commission and broker fees ANSW✅✅Which of the following is/are elements
that will be found in nearly every kind of listing agreement?
A. Complete or partial list of properties the buyer is considering.
B. All of these are included in nearly every kind of listing agreement
C. A checklist of confidential information that seller either does or does not want revealed to
potential buyers
D. The broker's commission and broker fees
D. enforceable ANSW✅✅A contract must have a legal purpose in order to be:
A. a promise
B. intentional
C. competent
D. enforceable
D. a rejection of the original offer ANSW✅✅A counteroffer is:
A. unenforceable
B. a default of the original offer
C. acceptance of the original offer
D. a rejection of the original offer
,D. Specific performance. ANSW✅✅What is the remedy called when one party has made a good
faith effort to perform his/her obligations under a contract and the other party has NOT performed
his/her obligations?
A. None of these answers are correct.
B. Tortious interference.
C. Substantial performance.
D. Specific performance.
B. All of these are potential contract clauses. ANSW✅✅Which of these IS NOT a potential contract
clause?
A. Arbitration
B. All of these are potential contract clauses.
C. Escape
D. Severability
D. An indemnification clause ANSW✅✅What states that a party, or parties, associated with a
contract will cover certain losses or expenses incurred by another party under the contract?
A. An escape clause
B. A severability clause
C. A "time is of the essence" clause
D. An indemnification clause
B. Material breach. ANSW✅✅What causes great harm or substantially lessens the value of the
contract for the non-breaching party?
A. Repudiation.
B. Material breach.
C. Fraud.
D. Immaterial breach.
D. Rescission and restitution. ANSW✅✅What returns the nonbreaching party to the position he
or she would have been in if the contract had not been made?
A. Cancellation.
B. Liquidated damages.
,C. Specific performance.
D. Rescission and restitution.
D. Inconvenience ANSW✅✅Which of these IS NOT a defense to breach of contract?
A. Illegality
B. Impossibility
C. Impracticability
D. Inconvenience
d. monetary benefit
Requirements for Validity To form a legally enforceable contract, the following basic elements are
necessary: Parties with legal capacity An offerA valid (legal) purposeConsiderationAn acceptance of
the exact terms of the offer ANSW✅✅Which of these IS NOT a required element of a contract?
a. mutual acceptance
b. consideration
c. legal capacity
d. monetary benefit
a. Estoppel
Estoppel is a legal prohibition which precludes a person from asserting or denying a fact or which
precludes a person from exercising a specific right, such as the right to additional lawsuits.
ANSW✅✅_________________ is a legal prohibition which precludes a person from asserting or
denying a fact or which precludes a person from exercising a specific right, such as the right to
additional lawsuits.
a. Estoppel
b. Fraud
c. Covenant
d. Mitigation
a. Novation
Novation involves changing fundamental aspects of a contract in such a way that the contract is
replaced with a new version that reflects the changes. In other words, novation is the renewal or
replacement of a contract. ANSW✅✅_______________ involves changing fundamental aspects of
a contract in such a way that the contract is replaced with a new version that reflects the changes.
, a. Novation
b. Assignment
c. Mitigation
d. Assumption
Scenario ANSW✅✅Gabe, a licensed broker in Texas, has an oral agreement to represent 17-year-
old Iris in the sale of a home she has inherited. He has not asked for any form of compensation for
his assistance. They search for a buyer. One week after Iris's 18th birthday, an agent approaches
Gabe with a potential buyer. Gabe relays the information to Iris and negotiates a fee/commission
agreement with her. He presents the offer to her along with a copy of the IABS. One week before
closing, Gabe decides that he and Iris need to place their agreement in writing, and the sale
proceeds.
c. No, their agreement lacks consideration for Gabe and legal capacity for Iris. ANSW✅✅1. Do
Gabe and Iris have a binding contract at the start of their relationship?
a. No, but only because it is not in writing.
b. Yes, but they need to reduce it to writing as soon as possible.
c. No, their agreement lacks consideration for Gabe and legal capacity for Iris.
d. Yes, they have effectively created an oral agreement
d. No, a contract regarding a real property transaction must be in writing. ANSW✅✅2. Once Iris
turns 18 and agrees to compensate Gabe for his efforts, do they have a valid contract for a
transaction in real property?
a. Yes, because the previous flaws have been corrected.
b. Yes, they now have a binding real property contract.
c. No, because they have not been specific enough as to what Gabe will receive, so there is
insufficient consideration.
d. No, a contract regarding a real property transaction must be in writing.
a. Statute of Frauds ANSW✅✅3. The underlying law requiring that all real property transactions
(among many other forms of contracts) being made in writing is called the:
a. Statute of Frauds
b. Statute of Contracts
c. Truth In Buying Act
d. Real estate in writing clause.
