©Themoon EXAM SOLUTIONS
11/11/2024 2:26PM
PROMULGATED CONTRACTS TEST
QUESTIONS AND VERIFIED ANSWERS
Contract: - Answers✓✓A legally binding and enforceable agreement to do or not to do a specific
thing
Promulgated Contract: - Answers✓✓A contract that has been approved and is required to be
used by license holders
In Texas, what are the two entities that promulgate contracts? - Answers✓✓TREC and TAR
In a real estate sale, the license holder must use the appropriate TREC-promulgated form
UNLESS another contract form is required by the buyer's lender. - Answers✓✓FALSE
(Explanation: In a real estate sale, the license holder must use the appropriate TREC-
promulgated form UNLESS another contract form is required by the property owner. The buyer's
lender has no influence over the sales contracts used in a transaction.)
A license holder should ___________. - Answers✓✓disclose all material facts to the client
Legally Competent: - Answers✓✓When an individual has reached the age of majority (18 years
of age) and has not been declared mentally incompetent by a judge
Void Contract: - Answers✓✓A contract that has no legal effect
Voidable Contract: - Answers✓✓When one or more of the parties has the authority to rescind
the contract
Consideration: - Answers✓✓A valuable item that each party exchanges in order to demonstrate
that they agree to the contract terms
, ©Themoon EXAM SOLUTIONS
11/11/2024 2:26PM
Which of the following is TRUE of mutual agreement? - Answers✓✓There cannot be mistakes
in the terms and conditions
All of the following are essential elements of a valid contract EXCEPT: - Answers✓✓earnest
money
What is NOT an element of a valid contract? - Answers✓✓earnest money
A law that requires real estate contracts to be in writing is the ______. - Answers✓✓statute of
Frauds
Valid Contract: - Answers✓✓Legal agreement meeting all the essential, basic requirements of
the law
Unenforceable Contract: - Answers✓✓A contract that cannot be enforced by the courts
5 essential elements of a valid contract: - Answers✓✓1.Mutual assent (100% agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
If two people have a contract for one to sell illegal drugs to the other, the contract would be: -
Answers✓✓Void
A contract that cannot be enforced by the courts is _____. - Answers✓✓unenforceable
, ©Themoon EXAM SOLUTIONS
11/11/2024 2:26PM
Executory Contract: - Answers✓✓A contract that is not completely executed or performed
Executed Contract: - Answers✓✓A contract in which all terms have been fulfilled by all parties
A contract that is "pending" is __________________. - Answers✓✓executory
The difference between an executory contract and an executed contract is that the executed
contract is _____. - Answers✓✓closed
The best way for any contract to terminate is to become _________________. -
Answers✓✓executed
According to Texas state law, a contract for deed and a lease with an option to buy are
considered ___________. - Answers✓✓executory contracts
Bilateral Contract: - Answers✓✓A contract in which one party must promise to do something for
another party and that party must promise to do something for the first party
Unilateral Contract: - Answers✓✓A contract made between two or more parties in which only
one of those parties makes a promise or otherwise accepts an obligation
An option to buy contract is a(n)_________________. - Answers✓✓Unilateral Contract
Which of the following is a bilateral contract? - Answers✓✓leases
If a contract says "time is of the essence," that means that it is due: - Answers✓✓as soon as
possible
11/11/2024 2:26PM
PROMULGATED CONTRACTS TEST
QUESTIONS AND VERIFIED ANSWERS
Contract: - Answers✓✓A legally binding and enforceable agreement to do or not to do a specific
thing
Promulgated Contract: - Answers✓✓A contract that has been approved and is required to be
used by license holders
In Texas, what are the two entities that promulgate contracts? - Answers✓✓TREC and TAR
In a real estate sale, the license holder must use the appropriate TREC-promulgated form
UNLESS another contract form is required by the buyer's lender. - Answers✓✓FALSE
(Explanation: In a real estate sale, the license holder must use the appropriate TREC-
promulgated form UNLESS another contract form is required by the property owner. The buyer's
lender has no influence over the sales contracts used in a transaction.)
A license holder should ___________. - Answers✓✓disclose all material facts to the client
Legally Competent: - Answers✓✓When an individual has reached the age of majority (18 years
of age) and has not been declared mentally incompetent by a judge
Void Contract: - Answers✓✓A contract that has no legal effect
Voidable Contract: - Answers✓✓When one or more of the parties has the authority to rescind
the contract
Consideration: - Answers✓✓A valuable item that each party exchanges in order to demonstrate
that they agree to the contract terms
, ©Themoon EXAM SOLUTIONS
11/11/2024 2:26PM
Which of the following is TRUE of mutual agreement? - Answers✓✓There cannot be mistakes
in the terms and conditions
All of the following are essential elements of a valid contract EXCEPT: - Answers✓✓earnest
money
What is NOT an element of a valid contract? - Answers✓✓earnest money
A law that requires real estate contracts to be in writing is the ______. - Answers✓✓statute of
Frauds
Valid Contract: - Answers✓✓Legal agreement meeting all the essential, basic requirements of
the law
Unenforceable Contract: - Answers✓✓A contract that cannot be enforced by the courts
5 essential elements of a valid contract: - Answers✓✓1.Mutual assent (100% agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
If two people have a contract for one to sell illegal drugs to the other, the contract would be: -
Answers✓✓Void
A contract that cannot be enforced by the courts is _____. - Answers✓✓unenforceable
, ©Themoon EXAM SOLUTIONS
11/11/2024 2:26PM
Executory Contract: - Answers✓✓A contract that is not completely executed or performed
Executed Contract: - Answers✓✓A contract in which all terms have been fulfilled by all parties
A contract that is "pending" is __________________. - Answers✓✓executory
The difference between an executory contract and an executed contract is that the executed
contract is _____. - Answers✓✓closed
The best way for any contract to terminate is to become _________________. -
Answers✓✓executed
According to Texas state law, a contract for deed and a lease with an option to buy are
considered ___________. - Answers✓✓executory contracts
Bilateral Contract: - Answers✓✓A contract in which one party must promise to do something for
another party and that party must promise to do something for the first party
Unilateral Contract: - Answers✓✓A contract made between two or more parties in which only
one of those parties makes a promise or otherwise accepts an obligation
An option to buy contract is a(n)_________________. - Answers✓✓Unilateral Contract
Which of the following is a bilateral contract? - Answers✓✓leases
If a contract says "time is of the essence," that means that it is due: - Answers✓✓as soon as
possible
