Promulgated Contract Forms - Texas
Mutual Consent - correct answer A "meeting of the minds" (offer and acceptance)
Unilateral Contract - correct answer A contract in which only one party is obligated to perform
Consideration - correct answer Something given in exchange for a promise
Option - correct answer An agreement between a buyer and seller giving the buyer the right to
purchase a property at a preset price for a given period of time.
Unenforceable Contract - correct answer A contract that cannot be enforced due to some flaw
or other issue in the contract.
Valid Contract - correct answer one that meets all the requirements of law; Competent Parties,
Offer and Acceptance, Legal Purpose, In Writing (when required by law), Consideration
Void Contract - correct answer invalid from the beginning, and has no effect on the parties, i.e.
illegal act
Voidable Contract - correct answer one that cannot be enforced against one or more of the
parties, i.e. contract entered into with a minor
Executory Contract - correct answer a contract that is binding on the parties, with one or more
of the parties having contractual duties that have not yet been performed. The effective date is
the date that acceptance was communicated to the offering party.
Bilateral Contract - correct answer Both parties are obligated to perform, i.e. a contract of sale
between a buyer and a seller
Assignment - correct answer Transfers all of the rights related to the contract to another party
known as an assignee. The assignee assumes primary liability for the performance under the
contracts, and the assignor, unless released, remains secondarily liable.
Novation - correct answer Occurs when a new contract is substituted for an existing one.
T or F - Contracts may be valid, void, voidable, but not unenforceable. - correct answer Fales
T or F - Though the sale is closed, that doesn't necessarily mean the contract has been fully
executed. - correct answer Fales
T or F - Contracts executed by minors are generally voidable at the option of the minor, but may
be enforced by the minor against the adult party. - correct answer True
T or F - Changes to the sale price, down payment or amount financed may not be agreed to by
the partied for any reason - correct answer False
T or F - All oral negotiations are voluntary, and do not become binding until written. - correct
answer True
,T or F - All states have a limitation of time in which an individual may file suit in court for
damages because a party breaches contract. - correct answer True
T or F - A contract for an illegal purpose is void, and the law treats the contract as if it were
never created. - correct answer True
T or F - An novation to a contract is an attachment that adds or further describes the rights and
duties of the parties. - correct answer False
T or F - An addendum to a contract occurs when a new contract is substituted for an existing
one. - correct answer False
T or F - Once all the terms of an offer have been agreed to and signed by the parties, and the
acceptance communicated to the offeror, the contract becomes binding on the parties. -
correct answer True
The five essential elements that must exist for a real estate sales contract to be considered valid
and enforceable are: legal purpose, competent parties, mutual consent, consideration and
______________.
a. signature of witnesses
b. in writing
c. acknowledgment by a notary
d. recording in county clerks office - correct answer B
If a contract has been entered into with a person who has been judged to be incompetent, that
contract is considered __________ because that person never had the capacity to enter into it.
a. executed
b. valid
c. voidable
d. void - correct answer D
Tammy is interested in Jolene's property, but wants to research the zoning laws before
purchasing. She has an agreement in which she paid a fee of $10,000 to keep the property
available for a preset price for 30 days, during which time Jolene cannot sell the property to
another. Tammy, however, can change her mind if she likes What kind of agreement is this?
, a. bilateral
b. oral
c. option
d. void - correct answer C
Promulgated Forms - correct answer Contract forms published by TREC
Counteroffer - correct answer A rejection of the original offer coupled with a new offer.
Unauthorized practice of law - correct answer License holders adding complex provisions to a
contract.
Lease-Purchase Agreement - correct answer An agreement that allows a tenant to purchase a
property during the lease term
Offeror - correct answer The party making an offer
Right of First Refusal - correct answer In a lease, 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.
Imputed Notice - correct answer An offer is presumed to have been delivered to the principle
when it is delivered to the agent.
Net Sheet - correct answer An estimate of the net proceeds to the seller, and should be
prepared based upon the offer being considered.
Seller Contribution - correct answer Contribution to the buyers closing costs reduce the amount
of cash needed by the buyer at closing.
Offeree - correct answer The party to whom the offer is made.
Acceptance of an offer - correct answer The accepting party does so with no change to the
contract whatsoever. Any change, no matter how trivial, turns the offer into a counteroffer.
Communication - correct answer An offer becomes a binding contract when it is signed by all
parties and the acceptance is communicated to the offering party. Also referred to as
notification.
T or F - The person to whom an offer is made has several options when responding to the offer
which includes doing nothing. - correct answer True
T or F - The Texas Real Estate Commission was created to draft and revise contract forms
capable of standardization for use by real estate license holders. - correct answer False
Mutual Consent - correct answer A "meeting of the minds" (offer and acceptance)
Unilateral Contract - correct answer A contract in which only one party is obligated to perform
Consideration - correct answer Something given in exchange for a promise
Option - correct answer An agreement between a buyer and seller giving the buyer the right to
purchase a property at a preset price for a given period of time.
Unenforceable Contract - correct answer A contract that cannot be enforced due to some flaw
or other issue in the contract.
Valid Contract - correct answer one that meets all the requirements of law; Competent Parties,
Offer and Acceptance, Legal Purpose, In Writing (when required by law), Consideration
Void Contract - correct answer invalid from the beginning, and has no effect on the parties, i.e.
illegal act
Voidable Contract - correct answer one that cannot be enforced against one or more of the
parties, i.e. contract entered into with a minor
Executory Contract - correct answer a contract that is binding on the parties, with one or more
of the parties having contractual duties that have not yet been performed. The effective date is
the date that acceptance was communicated to the offering party.
Bilateral Contract - correct answer Both parties are obligated to perform, i.e. a contract of sale
between a buyer and a seller
Assignment - correct answer Transfers all of the rights related to the contract to another party
known as an assignee. The assignee assumes primary liability for the performance under the
contracts, and the assignor, unless released, remains secondarily liable.
Novation - correct answer Occurs when a new contract is substituted for an existing one.
T or F - Contracts may be valid, void, voidable, but not unenforceable. - correct answer Fales
T or F - Though the sale is closed, that doesn't necessarily mean the contract has been fully
executed. - correct answer Fales
T or F - Contracts executed by minors are generally voidable at the option of the minor, but may
be enforced by the minor against the adult party. - correct answer True
T or F - Changes to the sale price, down payment or amount financed may not be agreed to by
the partied for any reason - correct answer False
T or F - All oral negotiations are voluntary, and do not become binding until written. - correct
answer True
,T or F - All states have a limitation of time in which an individual may file suit in court for
damages because a party breaches contract. - correct answer True
T or F - A contract for an illegal purpose is void, and the law treats the contract as if it were
never created. - correct answer True
T or F - An novation to a contract is an attachment that adds or further describes the rights and
duties of the parties. - correct answer False
T or F - An addendum to a contract occurs when a new contract is substituted for an existing
one. - correct answer False
T or F - Once all the terms of an offer have been agreed to and signed by the parties, and the
acceptance communicated to the offeror, the contract becomes binding on the parties. -
correct answer True
The five essential elements that must exist for a real estate sales contract to be considered valid
and enforceable are: legal purpose, competent parties, mutual consent, consideration and
______________.
a. signature of witnesses
b. in writing
c. acknowledgment by a notary
d. recording in county clerks office - correct answer B
If a contract has been entered into with a person who has been judged to be incompetent, that
contract is considered __________ because that person never had the capacity to enter into it.
a. executed
b. valid
c. voidable
d. void - correct answer D
Tammy is interested in Jolene's property, but wants to research the zoning laws before
purchasing. She has an agreement in which she paid a fee of $10,000 to keep the property
available for a preset price for 30 days, during which time Jolene cannot sell the property to
another. Tammy, however, can change her mind if she likes What kind of agreement is this?
, a. bilateral
b. oral
c. option
d. void - correct answer C
Promulgated Forms - correct answer Contract forms published by TREC
Counteroffer - correct answer A rejection of the original offer coupled with a new offer.
Unauthorized practice of law - correct answer License holders adding complex provisions to a
contract.
Lease-Purchase Agreement - correct answer An agreement that allows a tenant to purchase a
property during the lease term
Offeror - correct answer The party making an offer
Right of First Refusal - correct answer In a lease, 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.
Imputed Notice - correct answer An offer is presumed to have been delivered to the principle
when it is delivered to the agent.
Net Sheet - correct answer An estimate of the net proceeds to the seller, and should be
prepared based upon the offer being considered.
Seller Contribution - correct answer Contribution to the buyers closing costs reduce the amount
of cash needed by the buyer at closing.
Offeree - correct answer The party to whom the offer is made.
Acceptance of an offer - correct answer The accepting party does so with no change to the
contract whatsoever. Any change, no matter how trivial, turns the offer into a counteroffer.
Communication - correct answer An offer becomes a binding contract when it is signed by all
parties and the acceptance is communicated to the offering party. Also referred to as
notification.
T or F - The person to whom an offer is made has several options when responding to the offer
which includes doing nothing. - correct answer True
T or F - The Texas Real Estate Commission was created to draft and revise contract forms
capable of standardization for use by real estate license holders. - correct answer False
