Gold Coast Final Exam–Style Practice
Exam Questions with Answers &
Rationales
Questions 1–100
1. Which document is generally used to transfer legal title to real property?
A. Lease
B. Deed
C. Listing agreement
D. Promissory note
Correct Answer: B. Deed
Rationale: A deed is the instrument generally used to convey legal title to real property from one
party to another.
2. A promissory note primarily represents:
A. A transfer of title
B. A borrower's promise to repay a debt
C. A property tax assessment
D. A listing agreement
Correct Answer: B. A borrower's promise to repay a debt
Rationale: A promissory note is a written promise by the borrower to repay borrowed money
according to specified terms.
3. Which instrument is typically used to secure repayment of a real-estate loan?
A. Mortgage or deed of trust
B. Lease
C. Bill of sale
D. Listing agreement
,Correct Answer: A. Mortgage or deed of trust
Rationale: A mortgage or deed of trust creates a security interest in the property that protects the
lender if the borrower defaults.
4. Which characteristic is essential for a valid contract?
A. Mutual assent
B. Verbal advertising
C. Property insurance
D. Brokerage affiliation
Correct Answer: A. Mutual assent
Rationale: Contract formation generally requires mutual agreement, often expressed through an
offer and acceptance, along with other required elements such as consideration and legal
capacity.
5. Consideration in a contract refers to:
A. The property's appraised value only
B. Something of legal value exchanged by the parties
C. A broker's commission
D. The property's assessed tax value
Correct Answer: B. Something of legal value exchanged by the parties
Rationale: Consideration is the value exchanged between contracting parties. It can consist of
money, services, promises, or another legally sufficient form of value.
6. Which contract is created when only one party makes an enforceable promise?
A. Bilateral contract
B. Unilateral contract
C. Executed contract
D. Void contract
Correct Answer: B. Unilateral contract
,Rationale: A unilateral contract involves a promise exchanged for performance rather than a
promise exchanged for another promise.
7. A contract that has been fully performed by all parties is:
A. Executory
B. Executed
C. Voidable
D. Unilateral
Correct Answer: B. Executed
Rationale: An executed contract has had all required performance completed by the parties.
8. A contract that still has obligations remaining to be performed is:
A. Executory
B. Void
C. Rescinded
D. Implied
Correct Answer: A. Executory
Rationale: An executory contract contains obligations that have not yet been completely
performed.
9. Which contract is generally unenforceable from its inception because it lacks
legal validity?
A. Void contract
B. Valid contract
C. Executed contract
D. Bilateral contract
Correct Answer: A. Void contract
Rationale: A void contract has no legal enforceability because an essential legal requirement is
absent or the agreement involves an unlawful subject.
, 10. A voidable contract is one that:
A. Never existed in any form
B. Can be rejected or affirmed by a party with a legal right to do so
C. Is automatically criminal
D. Must always be performed
Correct Answer: B. Can be rejected or affirmed by a party with a legal right to do so
Rationale: A voidable contract is generally valid unless the protected party exercises the right to
avoid it.
11. Which party makes an offer?
A. Offeree
B. Offeror
C. Escrow agent
D. Appraiser
Correct Answer: B. Offeror
Rationale: The offeror is the party who makes the offer. The offeree is the party to whom the
offer is made.
12. Acceptance generally must:
A. Change all terms of the offer
B. Agree to the offer according to applicable contract principles
C. Be made by a third party
D. Always be notarized
Correct Answer: B. Agree to the offer according to applicable contract principles
Rationale: Acceptance must comply with the applicable rules for contract formation. A response
that materially changes the offer may instead constitute a counteroffer.
13. A counteroffer generally:
A. Terminates the original offer
B. Automatically creates a completed contract
Exam Questions with Answers &
Rationales
Questions 1–100
1. Which document is generally used to transfer legal title to real property?
A. Lease
B. Deed
C. Listing agreement
D. Promissory note
Correct Answer: B. Deed
Rationale: A deed is the instrument generally used to convey legal title to real property from one
party to another.
2. A promissory note primarily represents:
A. A transfer of title
B. A borrower's promise to repay a debt
C. A property tax assessment
D. A listing agreement
Correct Answer: B. A borrower's promise to repay a debt
Rationale: A promissory note is a written promise by the borrower to repay borrowed money
according to specified terms.
3. Which instrument is typically used to secure repayment of a real-estate loan?
A. Mortgage or deed of trust
B. Lease
C. Bill of sale
D. Listing agreement
,Correct Answer: A. Mortgage or deed of trust
Rationale: A mortgage or deed of trust creates a security interest in the property that protects the
lender if the borrower defaults.
4. Which characteristic is essential for a valid contract?
A. Mutual assent
B. Verbal advertising
C. Property insurance
D. Brokerage affiliation
Correct Answer: A. Mutual assent
Rationale: Contract formation generally requires mutual agreement, often expressed through an
offer and acceptance, along with other required elements such as consideration and legal
capacity.
5. Consideration in a contract refers to:
A. The property's appraised value only
B. Something of legal value exchanged by the parties
C. A broker's commission
D. The property's assessed tax value
Correct Answer: B. Something of legal value exchanged by the parties
Rationale: Consideration is the value exchanged between contracting parties. It can consist of
money, services, promises, or another legally sufficient form of value.
6. Which contract is created when only one party makes an enforceable promise?
A. Bilateral contract
B. Unilateral contract
C. Executed contract
D. Void contract
Correct Answer: B. Unilateral contract
,Rationale: A unilateral contract involves a promise exchanged for performance rather than a
promise exchanged for another promise.
7. A contract that has been fully performed by all parties is:
A. Executory
B. Executed
C. Voidable
D. Unilateral
Correct Answer: B. Executed
Rationale: An executed contract has had all required performance completed by the parties.
8. A contract that still has obligations remaining to be performed is:
A. Executory
B. Void
C. Rescinded
D. Implied
Correct Answer: A. Executory
Rationale: An executory contract contains obligations that have not yet been completely
performed.
9. Which contract is generally unenforceable from its inception because it lacks
legal validity?
A. Void contract
B. Valid contract
C. Executed contract
D. Bilateral contract
Correct Answer: A. Void contract
Rationale: A void contract has no legal enforceability because an essential legal requirement is
absent or the agreement involves an unlawful subject.
, 10. A voidable contract is one that:
A. Never existed in any form
B. Can be rejected or affirmed by a party with a legal right to do so
C. Is automatically criminal
D. Must always be performed
Correct Answer: B. Can be rejected or affirmed by a party with a legal right to do so
Rationale: A voidable contract is generally valid unless the protected party exercises the right to
avoid it.
11. Which party makes an offer?
A. Offeree
B. Offeror
C. Escrow agent
D. Appraiser
Correct Answer: B. Offeror
Rationale: The offeror is the party who makes the offer. The offeree is the party to whom the
offer is made.
12. Acceptance generally must:
A. Change all terms of the offer
B. Agree to the offer according to applicable contract principles
C. Be made by a third party
D. Always be notarized
Correct Answer: B. Agree to the offer according to applicable contract principles
Rationale: Acceptance must comply with the applicable rules for contract formation. A response
that materially changes the offer may instead constitute a counteroffer.
13. A counteroffer generally:
A. Terminates the original offer
B. Automatically creates a completed contract
