Promulgated Contract Forms – Texas
UPDATED Exam Questions and
CORRECT Answers
Mutual Consent - CORRECT ANSWER - A "meeting of the minds" (offer and acceptance)
Unilateral Contract - CORRECT ANSWER - A contract in which only one party is
obligated to perform
Consideration - CORRECT ANSWER - Something given in exchange for a promise
Option - CORRECT ANSWER - An agreement between a buyer and seller giving the
buyer the right to purchase a property at a preset price for a given period of time.
Unenforceable Contract - CORRECT ANSWER - A contract that cannot be enforced due
to some flaw or other issue in the contract.
Valid Contract - CORRECT ANSWER - one that meets all the requirements of law;
Competent Parties, Offer and Acceptance, Legal Purpose, In Writing (when required by law),
Consideration
Void Contract - CORRECT ANSWER - invalid from the beginning, and has no effect on
the parties, i.e. illegal act
Voidable Contract - CORRECT ANSWER - one that cannot be enforced against one or
more of the parties, i.e. contract entered into with a minor
Executory Contract - CORRECT ANSWER - a contract that is binding on the parties, with
one or more of the parties having contractual duties that have not yet been performed. The
effective date is the date that acceptance was communicated to the offering party.
,Bilateral Contract - CORRECT ANSWER - Both parties are obligated to perform, i.e. a
contract of sale between a buyer and a seller
Assignment - CORRECT ANSWER - Transfers all of the rights related to the contract to
another party known as an assignee. The assignee assumes primary liability for the performance
under the contracts, and the assignor, unless released, remains secondarily liable.
Novation - CORRECT ANSWER - Occurs when a new contract is substituted for an
existing one.
T or F - Contracts may be valid, void, voidable, but not unenforceable. - CORRECT
ANSWER - Fales
T or F - Though the sale is closed, that doesn't necessarily mean the contract has been fully
executed. - CORRECT ANSWER - Fales
T or F - Contracts executed by minors are generally voidable at the option of the minor, but may
be enforced by the minor against the adult party. - CORRECT ANSWER - True
T or F - Changes to the sale price, down payment or amount financed may not be agreed to by
the partied for any reason - CORRECT ANSWER - False
T or F - All oral negotiations are voluntary, and do not become binding until written. -
CORRECT ANSWER - True
T or F - All states have a limitation of time in which an individual may file suit in court for
damages because a party breaches contract. - CORRECT ANSWER - True
T or F - A contract for an illegal purpose is void, and the law treats the contract as if it were never
created. - CORRECT ANSWER - True
, T or F - An novation to a contract is an attachment that adds or further describes the rights and
duties of the parties. - CORRECT ANSWER - False
T or F - An addendum to a contract occurs when a new contract is substituted for an existing one.
- CORRECT ANSWER - False
T or F - Once all the terms of an offer have been agreed to and signed by the parties, and the
acceptance communicated to the offeror, the contract becomes binding on the parties. -
CORRECT ANSWER - True
The five essential elements that must exist for a real estate sales contract to be considered valid
and enforceable are: legal purpose, competent parties, mutual consent, consideration and
______________.
a. signature of witnesses
b. in writing
c. acknowledgment by a notary
d. recording in county clerks office - CORRECT ANSWER -B
If a contract has been entered into with a person who has been judged to be incompetent, that
contract is considered __________ because that person never had the capacity to enter into it.
a. executed
b. valid
c. voidable
d. void - CORRECT ANSWER -D
Tammy is interested in Jolene's property, but wants to research the zoning laws before
purchasing. She has an agreement in which she paid a fee of $10,000 to keep the property
UPDATED Exam Questions and
CORRECT Answers
Mutual Consent - CORRECT ANSWER - A "meeting of the minds" (offer and acceptance)
Unilateral Contract - CORRECT ANSWER - A contract in which only one party is
obligated to perform
Consideration - CORRECT ANSWER - Something given in exchange for a promise
Option - CORRECT ANSWER - An agreement between a buyer and seller giving the
buyer the right to purchase a property at a preset price for a given period of time.
Unenforceable Contract - CORRECT ANSWER - A contract that cannot be enforced due
to some flaw or other issue in the contract.
Valid Contract - CORRECT ANSWER - one that meets all the requirements of law;
Competent Parties, Offer and Acceptance, Legal Purpose, In Writing (when required by law),
Consideration
Void Contract - CORRECT ANSWER - invalid from the beginning, and has no effect on
the parties, i.e. illegal act
Voidable Contract - CORRECT ANSWER - one that cannot be enforced against one or
more of the parties, i.e. contract entered into with a minor
Executory Contract - CORRECT ANSWER - a contract that is binding on the parties, with
one or more of the parties having contractual duties that have not yet been performed. The
effective date is the date that acceptance was communicated to the offering party.
,Bilateral Contract - CORRECT ANSWER - Both parties are obligated to perform, i.e. a
contract of sale between a buyer and a seller
Assignment - CORRECT ANSWER - Transfers all of the rights related to the contract to
another party known as an assignee. The assignee assumes primary liability for the performance
under the contracts, and the assignor, unless released, remains secondarily liable.
Novation - CORRECT ANSWER - Occurs when a new contract is substituted for an
existing one.
T or F - Contracts may be valid, void, voidable, but not unenforceable. - CORRECT
ANSWER - Fales
T or F - Though the sale is closed, that doesn't necessarily mean the contract has been fully
executed. - CORRECT ANSWER - Fales
T or F - Contracts executed by minors are generally voidable at the option of the minor, but may
be enforced by the minor against the adult party. - CORRECT ANSWER - True
T or F - Changes to the sale price, down payment or amount financed may not be agreed to by
the partied for any reason - CORRECT ANSWER - False
T or F - All oral negotiations are voluntary, and do not become binding until written. -
CORRECT ANSWER - True
T or F - All states have a limitation of time in which an individual may file suit in court for
damages because a party breaches contract. - CORRECT ANSWER - True
T or F - A contract for an illegal purpose is void, and the law treats the contract as if it were never
created. - CORRECT ANSWER - True
, T or F - An novation to a contract is an attachment that adds or further describes the rights and
duties of the parties. - CORRECT ANSWER - False
T or F - An addendum to a contract occurs when a new contract is substituted for an existing one.
- CORRECT ANSWER - False
T or F - Once all the terms of an offer have been agreed to and signed by the parties, and the
acceptance communicated to the offeror, the contract becomes binding on the parties. -
CORRECT ANSWER - True
The five essential elements that must exist for a real estate sales contract to be considered valid
and enforceable are: legal purpose, competent parties, mutual consent, consideration and
______________.
a. signature of witnesses
b. in writing
c. acknowledgment by a notary
d. recording in county clerks office - CORRECT ANSWER -B
If a contract has been entered into with a person who has been judged to be incompetent, that
contract is considered __________ because that person never had the capacity to enter into it.
a. executed
b. valid
c. voidable
d. void - CORRECT ANSWER -D
Tammy is interested in Jolene's property, but wants to research the zoning laws before
purchasing. She has an agreement in which she paid a fee of $10,000 to keep the property
