Law of contracts practice test Exam Questions AND Correct
Answers
- ✔✔
A buyer and seller are parties to a sales contract. The buyer
makes several payments before the seller rescinds the
contract. The seller must: - ✔✔Return all payments they
received from the buyer
A buyer decides to terminate the contract during his option
period. He will submit the Termination of Contract notice to
the seller and will be entitled to: - ✔✔A refund of earnest
money
A buyer who needs to ensure they are able to sell their old
home before committing to the purchase of a new home
should: - ✔✔Include the promulgated addendum with the
contract
A buyer's offer is returned with two changes made. The
proposed contract is now a(n): - ✔✔Counteroffer
,A CLO: - ✔✔helps consumers find a lender, fill out an
application, and get loan approval all from their computer
A conventional loan: - ✔✔is not guaranteed or insured by any
government agency
A financing contingency clause requires that: - ✔✔the buyer
gets approved for a loan before being able to complete the
purchase of a home
A general inspector will inspect WHAT but not WHAT? - ✔✔A
general inspector will inspect accessible systems but not
anything buried or hidden
A home is about to be sold but is condemned before closing
day. The sales contract is discharged by operation of law.
Operation of law occurs when: - ✔✔a contract is not legally
valid or becomes unenforceable due to a statute of frauds, a
statute of limitations or other legal regulations
A homeowner who has given notice of title by recording their
property deed is protected against: - ✔✔Future claims of
interest in their property
,A license holder can have their license suspended or revoked
if: - ✔✔they failed to use a contract form required by TREC
A license holder cannot legally do anything regarding real
estate for a commission or a fee if: - ✔✔Their license is
suspended
A license holder may have his or her license suspended or
revoked for all of the following EXCEPT: - ✔✔The license
holder fails to perform an unlawful act requested by a client
A promissory note is: - ✔✔the borrowers personal promise to
repay the loan to the lender
A quitclaim deed carries: - ✔✔no covenants, guarantees, or
warranties
A sale and leaseback agreement is: - ✔✔a way for landowners
to free up capital while painting the same overhead expenses
, A sale contract must include the minimum requirements for a
valid contract as well as: - ✔✔A legal property description
A seller knows they need to correct a title defect when they
convey their property. They will likely utilize a: - ✔✔quitclaim
deed
A seller stays in a property a few days after closing. They
become the tenant and the buyer becomes the landlord. To
put this in writing, utilize the: - ✔✔Sellers temporary
residential lease
A seller's homeowner's insurance policy is cancelled at the
time of closing. They will receive WHAT after closing for the
part of their premium that was paid in advance? - ✔✔a refund
check
A seller's inability to provide good title or a buyer's inability to
obtain financing are both: - ✔✔valid reasons for cancelling a
contract
A title premium is only charged once, is paid at closing, and is
paid: - ✔✔in full upfront
Answers
- ✔✔
A buyer and seller are parties to a sales contract. The buyer
makes several payments before the seller rescinds the
contract. The seller must: - ✔✔Return all payments they
received from the buyer
A buyer decides to terminate the contract during his option
period. He will submit the Termination of Contract notice to
the seller and will be entitled to: - ✔✔A refund of earnest
money
A buyer who needs to ensure they are able to sell their old
home before committing to the purchase of a new home
should: - ✔✔Include the promulgated addendum with the
contract
A buyer's offer is returned with two changes made. The
proposed contract is now a(n): - ✔✔Counteroffer
,A CLO: - ✔✔helps consumers find a lender, fill out an
application, and get loan approval all from their computer
A conventional loan: - ✔✔is not guaranteed or insured by any
government agency
A financing contingency clause requires that: - ✔✔the buyer
gets approved for a loan before being able to complete the
purchase of a home
A general inspector will inspect WHAT but not WHAT? - ✔✔A
general inspector will inspect accessible systems but not
anything buried or hidden
A home is about to be sold but is condemned before closing
day. The sales contract is discharged by operation of law.
Operation of law occurs when: - ✔✔a contract is not legally
valid or becomes unenforceable due to a statute of frauds, a
statute of limitations or other legal regulations
A homeowner who has given notice of title by recording their
property deed is protected against: - ✔✔Future claims of
interest in their property
,A license holder can have their license suspended or revoked
if: - ✔✔they failed to use a contract form required by TREC
A license holder cannot legally do anything regarding real
estate for a commission or a fee if: - ✔✔Their license is
suspended
A license holder may have his or her license suspended or
revoked for all of the following EXCEPT: - ✔✔The license
holder fails to perform an unlawful act requested by a client
A promissory note is: - ✔✔the borrowers personal promise to
repay the loan to the lender
A quitclaim deed carries: - ✔✔no covenants, guarantees, or
warranties
A sale and leaseback agreement is: - ✔✔a way for landowners
to free up capital while painting the same overhead expenses
, A sale contract must include the minimum requirements for a
valid contract as well as: - ✔✔A legal property description
A seller knows they need to correct a title defect when they
convey their property. They will likely utilize a: - ✔✔quitclaim
deed
A seller stays in a property a few days after closing. They
become the tenant and the buyer becomes the landlord. To
put this in writing, utilize the: - ✔✔Sellers temporary
residential lease
A seller's homeowner's insurance policy is cancelled at the
time of closing. They will receive WHAT after closing for the
part of their premium that was paid in advance? - ✔✔a refund
check
A seller's inability to provide good title or a buyer's inability to
obtain financing are both: - ✔✔valid reasons for cancelling a
contract
A title premium is only charged once, is paid at closing, and is
paid: - ✔✔in full upfront
