Humber Real Estate - Course 1, Module 6
ACTUAL QUESTIONS AND CORRECT
ANSWERS
What is a contract? - CORRECT ANSWERS A legally binding
agreement between two or more persons, competent at law to enter into such
agreement, for consideration or value, to do or refrain from doing something
lawful.
True or false? An oral contract for the acquisition or disposition of any interest
in the land is enforceable. - CORRECT ANSWERS False. Any contract
in real estate is required to be in writing.
When drafting a contract, what does The Statute of Frauds require? -
CORRECT ANSWERS - Must be in writing to be enforceable by law
(the only exception is when a contract is verbal but parties begin to complete the
contract, then it could be enforceable)
What are the contract requirements of The Vendors and Purchasers Act? -
CORRECT ANSWERS - The seller is not bound to produce any abstract
of title, deed, copy of a deed or other evidence of title except as are in the
seller's possession or control
- The buyer shall search the title at the buyer's own expense and shall make any
objections in writing within 30 days from making of the contract
- The seller has 30 days in which to remove any objection made to the title. If
the seller is unable or unwilling and the buyer doesn't waive the request, the
seller may cancel the contract and return any deposit made, but is not otherwise
liable to the buyer
- Taxes, local improvements, insurance premiums, rent and interest shall be
adjusted as at the date of closing
- The conveyance (legal process of transferring of ownership from one party to
another) shall be prepared by the seller and the mortgage, if any, by the buyer;
,the buyer pays for the registration of the transfer/deed and the seller pays for the
discharge of the mortgage
- The buyer is entitled to possession or the receipt of rent and profits upon the
date of closing the transaction
What are the contract requirements of The Real Estate and Business Brokers
Act? - CORRECT ANSWERS - All agreements are reduced to writing at
the earliest opportunity, signed by the brokerage and submitted to the seller or
buyer for signature
- That registrants use their best efforts to ensure that all parties to an agreement
receive a copy as soon as possible and ensure that deposits and other related
documents (i.e. notice removing conditions) be delivered in accordance with the
agreement of purchase and sale
What is 'Evidence of a Contract'? - CORRECT ANSWERS Since a
contract is the legal relationship created between the parties, the contract
document is the written record and therefore a reflection of the mutual
commitment agreed to by the contracting parties. A document, such as an
Agreement of Purchase and Sale, is evidence of a contract.
Define the 'Parol Evidence Rule' - CORRECT ANSWERS In the
determination of contractual disputes, this rule provides that oral evidence is
inadmissible in court to vary or contradict the terms of a written contract, except
in a case of fraud or mistake.
What is 'Privity of Contract'? - CORRECT ANSWERS The general rule
that only parties to a contract can enforce it or be bound by it.
(i.e. A salesperson signs an agreement as a witness, but because the contract is
between the buyer and seller, only they are privy to the contract.)
What are the essential elements of a contract? - CORRECT ANSWERS -
Genuine intention (Both parties must consent to the terms of the contract)
- Lawful object (The contractual arrangement must be lawful)
, - Definite & clear (The subject and terms of the agreement must be stated
clearly)
- Consideration (Each party must receive something of value)
- Capacity of the parties (The parties entering into a contract must be legally
competent & of sound mind and legal after of majority to make the contract)
- Offer and acceptance (There must be mutual agreement between the parties)
What type of persons may be deemed incapable of contracting? - CORRECT
ANSWERS - Mentally incompetent
- Intoxicated
- Non est factum (did they know what they were signing?)
- Minor under 18 (can decide to go forward with the contract or choose to end
it)
In a partnership, can one partner sign a contact on behalf of the other person? -
CORRECT ANSWERS Yes. Any partner may bind the other partners in a
transaction during the ordinary course of business.
A binding contract requires an ___________ of something between the parties. -
CORRECT ANSWERS Exchange
What does "Signing under seal" mean? - CORRECT ANSWERS You
cannot change your mind.
What are the types of mistakes when considering law? - CORRECT ANSWERS
- Common mistake
- Mutual mistake
- Unilateral mistake
ACTUAL QUESTIONS AND CORRECT
ANSWERS
What is a contract? - CORRECT ANSWERS A legally binding
agreement between two or more persons, competent at law to enter into such
agreement, for consideration or value, to do or refrain from doing something
lawful.
True or false? An oral contract for the acquisition or disposition of any interest
in the land is enforceable. - CORRECT ANSWERS False. Any contract
in real estate is required to be in writing.
When drafting a contract, what does The Statute of Frauds require? -
CORRECT ANSWERS - Must be in writing to be enforceable by law
(the only exception is when a contract is verbal but parties begin to complete the
contract, then it could be enforceable)
What are the contract requirements of The Vendors and Purchasers Act? -
CORRECT ANSWERS - The seller is not bound to produce any abstract
of title, deed, copy of a deed or other evidence of title except as are in the
seller's possession or control
- The buyer shall search the title at the buyer's own expense and shall make any
objections in writing within 30 days from making of the contract
- The seller has 30 days in which to remove any objection made to the title. If
the seller is unable or unwilling and the buyer doesn't waive the request, the
seller may cancel the contract and return any deposit made, but is not otherwise
liable to the buyer
- Taxes, local improvements, insurance premiums, rent and interest shall be
adjusted as at the date of closing
- The conveyance (legal process of transferring of ownership from one party to
another) shall be prepared by the seller and the mortgage, if any, by the buyer;
,the buyer pays for the registration of the transfer/deed and the seller pays for the
discharge of the mortgage
- The buyer is entitled to possession or the receipt of rent and profits upon the
date of closing the transaction
What are the contract requirements of The Real Estate and Business Brokers
Act? - CORRECT ANSWERS - All agreements are reduced to writing at
the earliest opportunity, signed by the brokerage and submitted to the seller or
buyer for signature
- That registrants use their best efforts to ensure that all parties to an agreement
receive a copy as soon as possible and ensure that deposits and other related
documents (i.e. notice removing conditions) be delivered in accordance with the
agreement of purchase and sale
What is 'Evidence of a Contract'? - CORRECT ANSWERS Since a
contract is the legal relationship created between the parties, the contract
document is the written record and therefore a reflection of the mutual
commitment agreed to by the contracting parties. A document, such as an
Agreement of Purchase and Sale, is evidence of a contract.
Define the 'Parol Evidence Rule' - CORRECT ANSWERS In the
determination of contractual disputes, this rule provides that oral evidence is
inadmissible in court to vary or contradict the terms of a written contract, except
in a case of fraud or mistake.
What is 'Privity of Contract'? - CORRECT ANSWERS The general rule
that only parties to a contract can enforce it or be bound by it.
(i.e. A salesperson signs an agreement as a witness, but because the contract is
between the buyer and seller, only they are privy to the contract.)
What are the essential elements of a contract? - CORRECT ANSWERS -
Genuine intention (Both parties must consent to the terms of the contract)
- Lawful object (The contractual arrangement must be lawful)
, - Definite & clear (The subject and terms of the agreement must be stated
clearly)
- Consideration (Each party must receive something of value)
- Capacity of the parties (The parties entering into a contract must be legally
competent & of sound mind and legal after of majority to make the contract)
- Offer and acceptance (There must be mutual agreement between the parties)
What type of persons may be deemed incapable of contracting? - CORRECT
ANSWERS - Mentally incompetent
- Intoxicated
- Non est factum (did they know what they were signing?)
- Minor under 18 (can decide to go forward with the contract or choose to end
it)
In a partnership, can one partner sign a contact on behalf of the other person? -
CORRECT ANSWERS Yes. Any partner may bind the other partners in a
transaction during the ordinary course of business.
A binding contract requires an ___________ of something between the parties. -
CORRECT ANSWERS Exchange
What does "Signing under seal" mean? - CORRECT ANSWERS You
cannot change your mind.
What are the types of mistakes when considering law? - CORRECT ANSWERS
- Common mistake
- Mutual mistake
- Unilateral mistake
