Champions School of Real Estate-Law of Contracts Exam 1.pdf

Champions School of Real Estate-
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Law of Contracts Exam 1
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Default..of..Contract..-
..correct..answer.. When..a..party..to..a..contract..fails..to..perform..unde
r..the..contract,..also..known..as..breach..of..contract.


Buyer..Default(Remedies)..-
..correct..answer.. In..the..event..of..default..by..the..buyer,..the..seller..m
ay..have..several..options..which..include:
-Liquidated..Damages
-Monetary..Damages
-Specific..Performance


Liquidated..Damages..-
..correct..answer.. The..seller..can..choose..to..accept..the..buyer's..earn
est..money..as..liquidated..damages,..releasing..all..parties..from..any..further..
obligation..under..the..contract...Liquidated..damages..are..damages..that..ar
e..established..in..the..contract.


Monetary..Damages..-
..correct..answer.. In..addition..to..specific..performance,..the..injured..p
arty..may.."seek..such..other..relief..as..may..be..provided..by..law."..This..would.
.be..an..award..of..monetary..damages..by..the..court...Because..monetary..da

,mages..are..awarded..by..the..court,..one..never..knows..what..they..will..be..un
til..the..court..rules.


Specific..Performance..-
..correct..answer.. The..injured..party..files..a..court..action..seeking..an..o
rder..of..the..court..directing..the..defaulting..party..to..perform..according..to..
the..terms..of..the..contract...Specific..performance..is..the..only..remedy..that..
would..possibly..result..in..the..full..execution..(closing)..of..the..transaction.


Buyer..Default..-
..correct..answer.. In..the..event..of..default..by..the..buyer,..the..seller..m
ay..have..several..options..which..include:
-Liquidated..Damages
-Monetary..Damages
-Refund..of..Earnest..Money


Refund..of..Earnest..Money..-
..correct..answer.. The..buyer's..acceptance..of..an..earnest..money..ref
und..terminates..the..contract,..releasing..both..parties..from..any..further..obl
igation..under..the..contract...Because..this..is..a..refund..of..the..buyer's..earne
st..money,..this..cannot..be..considered..liquidated..damages.


TREC..has..only..two..promulgated..lease..forms:..-
..correct..answer.. 1...Buyer's..Temporary..Residential..Lease
2...Seller's..Temporary..Residential..Lease

,Buyer's..Temporary..Residential..Lease..-
..correct..answer.. For..use..when..the..buyer..occupies..the..property..fo
r
no..more..than..90..days..prior..to..closing.


Seller's..Temporary..Residential..Lease..-
..correct..answer.. For..use..when..the..seller..occupies..the..property..for
..no..more..than..90..days..after..closing.




Right..of..First..Refusal..-
..correct..answer.. Gives..the..tenant..the..right..to..purchase..the..leased.
.property..by..matching..or..bettering..any..offer..before..the..property..will..be..


sold..to..someone..else.
-TREC..does..not..have..promulgated..forms..for..this.


Lease-Purchase..Agreement..-
..correct..answer.. Gives..the..tenant..occupancy..in..the..present..time..a
nd..the..right..to..purchase..at..a..future..date...In..an..option..to..purchase,..the..
price..is..set..when..the..lease..agreement..is..negotiated,..which..is..advantage
ous..to..the..tenant-buyer...
-TREC..does..not..have..promulgated..forms..for..this.


TVLB..(Texas..Veteran's..Loan..Program)..-
..correct..answer.. To..participate..in..the..program,..the..veteran..obtain

, s..an..FHA,..VA,..or..conventional..loan..from..a..participating..lender...The..quali
fication..process..is..the..same..as..for..any..other..FHA,..VA,..or..conventional..lo
an...The..difference..is..that..the..loan..is..sold..to..the..Texas..Veterans..Land..Bo
ard..(VLB),..as..opposed..to..a..secondary..market..purchaser..such..as..Fannie..
Mae..or..Freddie..Mac...The..primary..benefit..to..the..veteran..is..that..the..rate..
on..the..Veterans..Land..Board..loan..is..often..up..to..one..percent..below..prev
ailing..market..rates.


Physical..Characteristics..of..Land..-
..correct..answer.. 1...Indestructibility..or..durability..
2...Immobility
3...Nonhomogeneity


Economic..Characteristics..of..Land..-..correct..answer.. 1...Scarcity
2...Modification
3...Fixity
4...Stitus


Indestructibility..or..Durability..-
..correct..answer.. Refers..to..the..fact..that..land..cannot..be..destroyed


Immobility..-
..correct..answer.. Refers..to..the..fact..that..land..cannot..be..moved.