Promulgated Contract Forms Practice Test Questions With All Correct Answers

Promulgated Contract Forms Practice Test Questions With All Correct Answers Elements of a Valid and Enforceable Contract - CORRECT ANSWERS 1. Competent Parties 2. Offer and Acceptance (mutual consent) 3. Legal Purpose 4. In Writing 5. Consideration Valid Contract - CORRECT ANSWERS A contract that meets all the requirements of law. Void Contract - CORRECT ANSWERS A contract having no legal force or binding effect, it is invalid from the beginning and does not affect the parties. Voidable Contract - CORRECT ANSWERS An agreement that cannot be enforced against one or more of the parties. Unenforceable Contract - CORRECT ANSWERS A valid contract rendered unenforceable by some statute/law, a flaw in the contract, passage of time, or other issues that make enforcement impossible. Mutual Consent - CORRECT ANSWERS Meeting of the Minds Executory Contract - CORRECT ANSWERS A contract that is binding on the parties but has contractual duties that have not yet been fully performed. Executed Contract - CORRECT ANSWERS A contract that has been completely performed, or executed by both parties. Effective Date of Contract - CORRECT ANSWERS The date that acceptance was communicated to the offering party. Bilateral Contract - CORRECT ANSWERS A contract in which both parties are obligated to perform. Unilateral Contract - CORRECT ANSWERS A contract in which only one party is obligated to perform. Common Amendments to Original Contract - CORRECT ANSWERS 1. Changes to the closing date. 2. Changes to the sales price, downpayment and/or amount to be financed. 3. Repairs that the seller agrees to perform. 4. Removal or waiver of contingencies. Provisions of an Addendum - CORRECT ANSWERS Sometimes a provision in an addendum contradicts a provision in the main body of the contract. In such a case, THE PROVISION IN THE ADDENDUM PREVAILS. Assignment of Contract - CORRECT ANSWERS Transfers all of the rights related to the contract to another party known as an assignee. The assignee assumes primary liability for performance under the contracts and the assignor, unless released, remains secondarily liable. Assignments When Possible/Not Possible - CORRECT ANSWERS Most contracts are assignable; however, there are some exceptions. CONTRACTS FOR PERSONAL SERVICES ARE NOT ASSIGNABLE. Therefore, a BUYER'S REPRESENTATION AGREEMENT OR LISTING AGREEMENT ARE NOT ASSIGNABLE. Mortgages generally have a clause that prohibits assignment (assumption) without prior approval. PURCHASE CONTRACTS are not assignable if they are contingent upon the buyer obtaining credit or some other contingency that makes assignment impossible. Unless otherwise prohibited LEASES ARE ASSIGNABLE, and the new lessee is bound to the original terms of the lease. Novation - CORRECT ANSWERS Occurs when a new contract is substituted for an existing one. Statue of Limitations - CORRECT ANSWERS Period of time that one has to file a lawsuit for damages due to a breach of contract. In Texas it is 2 years for an oral contract and 4 years for a written contract.