Texas Real Estate Exam (State Portion): Contracts Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

Texas Real Estate Exam (State Portion): Contracts Questions and Answers | Latest Version | 2025/2026 | Correct & Verified What is the essential element that ensures a Texas real estate contract can be legally enforced? Mutual consent between the parties. When does a Texas real estate contract become binding? When the last party signs and communicates acceptance. What term describes a contract that has not yet been fully performed by either party? Executory contract. Which contract is missing one or more essential elements and has no legal effect? Void contract. What type of contract allows only one party to enforce it? Unilateral contract. What document is commonly used in Texas to form a residential sales contract? TREC promulgated contract form. 2 What happens if a buyer fails to deliver earnest money on time in Texas? The seller may terminate the contract. Which contract element refers to something of value exchanged by the parties? Consideration. What is the legal term for the party making an offer? Offeror. What is required for a valid acceptance of a real estate offer in Texas? Acceptance must be in writing and signed. What type of contract becomes valid only after a specific event occurs? Contingent contract. What does “time is of the essence” enforce in Texas contracts? Strict adherence to contract deadlines. What is the legal effect of a counteroffer? It terminates the original offer. When may an offer be withdrawn in Texas? 3 Any time before acceptance is communicated. What makes a contract voidable rather than void? One party has the option to enforce or cancel it. Which party must have legal capacity to enter a binding contract? All parties to the contract. What happens to a contract signed by a minor in Texas? It is voidable by the minor. What type of contract results from fraud or misrepresentation? Voidable contract. Which contract clause allows termination during a specific timeframe for any reason? Option period. What happens to the option fee if the buyer terminates during the option period? It is not refunded. What is the primary purpose of earnest money in a Texas contract? To demonstrate the buyer’s good faith. 4 Which party typically holds earnest money in Texas transactions? The escrow agent. What happens if the seller fails to disclose a known material defect? The contract may be voidable. What is required for a contract to satisfy the Statute of Frauds? It must be in writing and signed by the parties. Which contracts must comply with the Statute of Frauds in Texas real estate? Contracts for the sale of real property.