LAW OF CONTRACTS EXAM 2025
QUESTIONS AND ANSWERS
A buyer defaults on a contract and the seller chooses to receive the earnest money. This is an
example of: - ANS Liquidated damages
In a residential lease with a "right of first refusal" provision: - ANS The tenant has the right to
match or better any offer the landlord receives to prevent the property from being sold to
someone else
Bill is the buyer purchasing a property from Sally. All contingencies have been met and the
parties are ready to close. One day prior to closing, Sally announces that she has changed her
mind and is going to keep the property. Bill is determined to complete the purchase and
acquire the property. The only default remedy in the contract that could result in Bill acquiring
the property is___________________________. - ANS Specific Performance
Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told
Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that
would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree
that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer
has: - ANS Engaged in the unlawful practice of law
Texas Veteran's Housing Assistance Program loans can be: - ANS (a) FHA
(b) VA
(c) Conventional
(d) Any of the above
D
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, The four economic characteristics of land are: scarcity, fixity, situs and ______ -
ANS Modification
Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for
$199,500. In a recent phone conversation, the seller told Joe he would accept no less than
$185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offe
- ANS Joe should present the offer to the seller
An abstract of title is: - ANS A complete written history of title
The Buyer and Seller Temporary Residential Lease forms are good for any period up to: -
ANS 90 days
An option is: - ANS unilateral contract
The Special Provisions paragraph of the contract allows license holders to insert: - ANS (a)
Factual business details
(b) Statements not addressed in the contract
(c) Information for which there is no TREC promulgated addendum, lease or mandatory form
(d) All of the above
Correct answer: d
A seller is going to continue to occupy a property for two days after closing. In this case, the
parties should use the Buyer's Temporary Residential Lease form. - ANS false
A contract in which only one party is obligated to perform is a________ contract. -
ANS Unilateral
2 Copyright ©2025 THESTAR ALL RIGHTS RESERVED
QUESTIONS AND ANSWERS
A buyer defaults on a contract and the seller chooses to receive the earnest money. This is an
example of: - ANS Liquidated damages
In a residential lease with a "right of first refusal" provision: - ANS The tenant has the right to
match or better any offer the landlord receives to prevent the property from being sold to
someone else
Bill is the buyer purchasing a property from Sally. All contingencies have been met and the
parties are ready to close. One day prior to closing, Sally announces that she has changed her
mind and is going to keep the property. Bill is determined to complete the purchase and
acquire the property. The only default remedy in the contract that could result in Bill acquiring
the property is___________________________. - ANS Specific Performance
Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told
Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that
would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree
that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer
has: - ANS Engaged in the unlawful practice of law
Texas Veteran's Housing Assistance Program loans can be: - ANS (a) FHA
(b) VA
(c) Conventional
(d) Any of the above
D
1 Copyright ©2025 THESTAR ALL RIGHTS RESERVED
, The four economic characteristics of land are: scarcity, fixity, situs and ______ -
ANS Modification
Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for
$199,500. In a recent phone conversation, the seller told Joe he would accept no less than
$185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offe
- ANS Joe should present the offer to the seller
An abstract of title is: - ANS A complete written history of title
The Buyer and Seller Temporary Residential Lease forms are good for any period up to: -
ANS 90 days
An option is: - ANS unilateral contract
The Special Provisions paragraph of the contract allows license holders to insert: - ANS (a)
Factual business details
(b) Statements not addressed in the contract
(c) Information for which there is no TREC promulgated addendum, lease or mandatory form
(d) All of the above
Correct answer: d
A seller is going to continue to occupy a property for two days after closing. In this case, the
parties should use the Buyer's Temporary Residential Lease form. - ANS false
A contract in which only one party is obligated to perform is a________ contract. -
ANS Unilateral
2 Copyright ©2025 THESTAR ALL RIGHTS RESERVED
