LAW OF CONTRACTS EXAM 2 ACTUAL EXAM
PAPER 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Substitution of a new contract for an existing contract is called?
Answer: Novation
◉ A contact may be discharged or terminated when which of the
following occurs? Answer: Impossibility of Performance
◉ The law that requires that contracts be in writing and signed to be
enforceable in a court of law is the? Answer: Statute of Frauds
◉ Contracts may be discharged or terminated whenever the parties
agree, along with a written acceptance, that the work performed is
close enough to completion and that the contract is discharged even
if some minor elements remain unperformed. This is called?
Answer: Partial Performance
◉ When all of the parties to a contract agree to terminate, it is said
to be terminated by? Answer: Mutual Agreement
,◉ One party cancelling or terminating a contract as though it had
never been made is? Answer: Rescission
◉ One party cancelling or terminating a contact without a return to
the original position is called? Answer: Cancellation
◉ If, upon the receipt of an offer to purchase a property subject to
certain conditions, the seller makes a counteroffer, the prospective
buyer is? Answer: Relieved of the original offer.
◉ A listing under which a broker's commission is the difference
between the sales proceeds and an amounted desired by the seller
is? Answer: A net listing
◉ All of the following are written agreements used by license
holders EXCEPT... Answer: Business opportunity contracts.
◉ When preprinted forms promulgated or approved by TREC do not
sufficiently cover special provisions in a transaction, the license
holder should... Answer: Have the parties consult their own
attorneys to draft language acceptable to both.
◉ A situation in which a seller is retaining title to the property until
full payment is made by the buyer is? Answer: A land contract.
, ◉ An agreement where one broker is given the exclusive right and
authorization to represent the seller in marketing the seller's
property is called? Answer: An exclusive-right-to-sell listing.
◉ An agreement where the seller gives the exclusive right of
representation to a broker-agent to market the seller's property but
reserves the right to sell the property, without obligation to pay the
broker a commission, is called? Answer: An exclusive-agency listing.
◉ A seller listed her residence with a broker. The broker brought an
offer at full price and terms of the listing from buyers who are ready,
willing, and able to pay cash for the property. However, the seller
rejected the buyer's offer. In this situation, the seller... Answer: Owes
a commission to the broker.
◉ The type of listing that allows the broker to offer the property at
any price greater than the total amount the seller wants is the?
Answer: Net listing.
◉ Who are the parties of a listing agreement? Answer: The broker
and the owner.
◉ A broker should discuss all of the following issues with a buyer
before signing a buyer representation agreement EXCEPT? Answer:
The source of compensation determines the agency relationship.
PAPER 2026 QUESTIONS WITH SOLUTIONS
GRADED A+
◉ Substitution of a new contract for an existing contract is called?
Answer: Novation
◉ A contact may be discharged or terminated when which of the
following occurs? Answer: Impossibility of Performance
◉ The law that requires that contracts be in writing and signed to be
enforceable in a court of law is the? Answer: Statute of Frauds
◉ Contracts may be discharged or terminated whenever the parties
agree, along with a written acceptance, that the work performed is
close enough to completion and that the contract is discharged even
if some minor elements remain unperformed. This is called?
Answer: Partial Performance
◉ When all of the parties to a contract agree to terminate, it is said
to be terminated by? Answer: Mutual Agreement
,◉ One party cancelling or terminating a contract as though it had
never been made is? Answer: Rescission
◉ One party cancelling or terminating a contact without a return to
the original position is called? Answer: Cancellation
◉ If, upon the receipt of an offer to purchase a property subject to
certain conditions, the seller makes a counteroffer, the prospective
buyer is? Answer: Relieved of the original offer.
◉ A listing under which a broker's commission is the difference
between the sales proceeds and an amounted desired by the seller
is? Answer: A net listing
◉ All of the following are written agreements used by license
holders EXCEPT... Answer: Business opportunity contracts.
◉ When preprinted forms promulgated or approved by TREC do not
sufficiently cover special provisions in a transaction, the license
holder should... Answer: Have the parties consult their own
attorneys to draft language acceptable to both.
◉ A situation in which a seller is retaining title to the property until
full payment is made by the buyer is? Answer: A land contract.
, ◉ An agreement where one broker is given the exclusive right and
authorization to represent the seller in marketing the seller's
property is called? Answer: An exclusive-right-to-sell listing.
◉ An agreement where the seller gives the exclusive right of
representation to a broker-agent to market the seller's property but
reserves the right to sell the property, without obligation to pay the
broker a commission, is called? Answer: An exclusive-agency listing.
◉ A seller listed her residence with a broker. The broker brought an
offer at full price and terms of the listing from buyers who are ready,
willing, and able to pay cash for the property. However, the seller
rejected the buyer's offer. In this situation, the seller... Answer: Owes
a commission to the broker.
◉ The type of listing that allows the broker to offer the property at
any price greater than the total amount the seller wants is the?
Answer: Net listing.
◉ Who are the parties of a listing agreement? Answer: The broker
and the owner.
◉ A broker should discuss all of the following issues with a buyer
before signing a buyer representation agreement EXCEPT? Answer:
The source of compensation determines the agency relationship.
