TEXAS PROMULGATED CONTRACTS EOC 2025/2026
QUESTIONS WITH ANSWERS GRADED A+
✔✔Voidable contract - ✔✔A contract where one or more of the parties can declare the
contract void.
✔✔The fundamental difference between void and voidable contracts is: - ✔✔A void
contact is not legally valid or enforceable at any point.
A voidable contract can be legal and enforceable depending on how the contract is
used.
✔✔Unenforceable contract - ✔✔A contract the court will not enforce. If the parties
perform to all of the terms of the agreement, it will be valid, but the court will not compel
them to perform if one or both of the parties chooses not to perform.
✔✔A contract can be said to be unenforceable when it goes against the
_______________________. - ✔✔Statutes of Fraud
✔✔Two types of contracts - ✔✔implied and expressed
✔✔Express contracts - ✔✔A contract in which all the terms are clearly set forth in either
written or spoken words.
✔✔Implied contracts - ✔✔A contract or agreement that creates obligations without
verbally expressed terms but through actions
✔✔Executed contract - ✔✔One that has been completely or fully performed and no
further obligations remain
✔✔Executory contracts - ✔✔Contracts or leases under which both parties to the
agreement have duties remaining to be performed. If a contract or lease is executory, a
debtor may assume it (keep the contract) or reject it (terminate the contract).
✔✔Bilateral contract - ✔✔An enforceable contract between two parties with both parties
having rights and obligations to that contract.
✔✔Characteristics of a bilateral contract: - ✔✔"Bi" meaning two
Must have two promises
Both parties have rights and obligations
Most real estate contracts are bilateral
,✔✔Unilateral contract - ✔✔A contract in which a party promises to perform without
expectation of performance by the other party. The second party is not bound to act, but
if he or she does, the first party is obligated to keep the promise.
Example: The owner promises to pay the broker a commission if the broker will find a
ready, willing, and able buyer. If the broker fails to obtain a ready, willing, and able
buyer, the agreement is not binding on him or her because the broker never made a
promise in the agreement. However, if the broker does perform as requested, then the
seller is obligated to pay the commission as promised.
✔✔Characteristics of a unilateral contract: - ✔✔"Uni" meaning one - only one promise
A promise in exchange for an act
A one-sided agreement
One party has all the rights and the other party all the obligations
✔✔Reasonable time - ✔✔That amount of time which is fairly necessary, conveniently,
to do what the contract requires to be done, as soon as circumstances permit. It is the
period determined from trade practice, custom or from circumstances.
Example: the acceptance of an offer must be made within a "reasonable time" if no time
is specified.
✔✔Time is of the essence clause - ✔✔A phrase in a contract that means that strict
compliance with the time for performance is required.
When a party wants to make sure that the agreement makes it clear that it is important
that the contract obligations be completed on time, a contract can include a provision
that specifically states: "Time is of the essence."
✔✔True or False: Real estate licensees should never add the words "time is of the
essence" to a TREC promulgated real estate contract without the explicit direction of the
parties of the contract. To do so could put the real estate licensee in jeopardy of
practicing law without a license. - ✔✔True
✔✔The owner has obligations to disclose any environmental hazard that may affect
future occupants including: - ✔✔Asbestos
Carbon monoxide
Electromagnetic fields
Groundwater contamination
Lead-based paint
Mold
PCB's
Radon gas
Underground storage tanks
Urea formaldehyde
, Waste disposal sites
Presence of any endangered species of animals or plants
✔✔Closing of a Contract - ✔✔Seller Obligations:
- delivering the deed that conveys the property to the buyer
- providing an abstract of title or a title insurance policy
- make sure the buyer receives a copy of the release of lien that the seller had on the
property that will be paid off during the closing
- provide any documents necessary to make the title good when passing ownership to
the buyer
Buyer Obligations:
- should bring the balance of the funds necessary to complete the purchase, including
any new loans from a mortgage company and the down payment agreed to in the
contract
- have a hazard insurance policy in place for the next year to protect the lender in case
of a natural disaster
- obtain a survey to meet the requirements of the lending institution
✔✔When an essential element is missing in an agreement and the courts would not
hold it as a contract, then the agreement would be: - ✔✔Void
✔✔When one party could change their mind and exit a contract, it is said to be: -
✔✔Voidable
✔✔When one party may be in default but because of the nature of the agreement, the
damaged party would not have the ability to sue the other party in court, this is what
type of contract? - ✔✔Unenforceable
✔✔True or False: An important note regarding addenda is that any time one is attached
to the earnest money contract, the box referencing that addendum should be checked in
paragraph 22 of most promulgated contracts. If the addendum is not on the list, then it
should be written into the line that says "Other" and that box should be checked. -
✔✔True
✔✔If a contract has already been agreed to and both parties want to change some part
of it, it is best for a real estate professional to use an ______________________. -
✔✔Amendment
✔✔Any amendments must be in writing and signed by both parties to comply with the
_________________________. - ✔✔Statute of Frauds
QUESTIONS WITH ANSWERS GRADED A+
✔✔Voidable contract - ✔✔A contract where one or more of the parties can declare the
contract void.
✔✔The fundamental difference between void and voidable contracts is: - ✔✔A void
contact is not legally valid or enforceable at any point.
A voidable contract can be legal and enforceable depending on how the contract is
used.
✔✔Unenforceable contract - ✔✔A contract the court will not enforce. If the parties
perform to all of the terms of the agreement, it will be valid, but the court will not compel
them to perform if one or both of the parties chooses not to perform.
✔✔A contract can be said to be unenforceable when it goes against the
_______________________. - ✔✔Statutes of Fraud
✔✔Two types of contracts - ✔✔implied and expressed
✔✔Express contracts - ✔✔A contract in which all the terms are clearly set forth in either
written or spoken words.
✔✔Implied contracts - ✔✔A contract or agreement that creates obligations without
verbally expressed terms but through actions
✔✔Executed contract - ✔✔One that has been completely or fully performed and no
further obligations remain
✔✔Executory contracts - ✔✔Contracts or leases under which both parties to the
agreement have duties remaining to be performed. If a contract or lease is executory, a
debtor may assume it (keep the contract) or reject it (terminate the contract).
✔✔Bilateral contract - ✔✔An enforceable contract between two parties with both parties
having rights and obligations to that contract.
✔✔Characteristics of a bilateral contract: - ✔✔"Bi" meaning two
Must have two promises
Both parties have rights and obligations
Most real estate contracts are bilateral
,✔✔Unilateral contract - ✔✔A contract in which a party promises to perform without
expectation of performance by the other party. The second party is not bound to act, but
if he or she does, the first party is obligated to keep the promise.
Example: The owner promises to pay the broker a commission if the broker will find a
ready, willing, and able buyer. If the broker fails to obtain a ready, willing, and able
buyer, the agreement is not binding on him or her because the broker never made a
promise in the agreement. However, if the broker does perform as requested, then the
seller is obligated to pay the commission as promised.
✔✔Characteristics of a unilateral contract: - ✔✔"Uni" meaning one - only one promise
A promise in exchange for an act
A one-sided agreement
One party has all the rights and the other party all the obligations
✔✔Reasonable time - ✔✔That amount of time which is fairly necessary, conveniently,
to do what the contract requires to be done, as soon as circumstances permit. It is the
period determined from trade practice, custom or from circumstances.
Example: the acceptance of an offer must be made within a "reasonable time" if no time
is specified.
✔✔Time is of the essence clause - ✔✔A phrase in a contract that means that strict
compliance with the time for performance is required.
When a party wants to make sure that the agreement makes it clear that it is important
that the contract obligations be completed on time, a contract can include a provision
that specifically states: "Time is of the essence."
✔✔True or False: Real estate licensees should never add the words "time is of the
essence" to a TREC promulgated real estate contract without the explicit direction of the
parties of the contract. To do so could put the real estate licensee in jeopardy of
practicing law without a license. - ✔✔True
✔✔The owner has obligations to disclose any environmental hazard that may affect
future occupants including: - ✔✔Asbestos
Carbon monoxide
Electromagnetic fields
Groundwater contamination
Lead-based paint
Mold
PCB's
Radon gas
Underground storage tanks
Urea formaldehyde
, Waste disposal sites
Presence of any endangered species of animals or plants
✔✔Closing of a Contract - ✔✔Seller Obligations:
- delivering the deed that conveys the property to the buyer
- providing an abstract of title or a title insurance policy
- make sure the buyer receives a copy of the release of lien that the seller had on the
property that will be paid off during the closing
- provide any documents necessary to make the title good when passing ownership to
the buyer
Buyer Obligations:
- should bring the balance of the funds necessary to complete the purchase, including
any new loans from a mortgage company and the down payment agreed to in the
contract
- have a hazard insurance policy in place for the next year to protect the lender in case
of a natural disaster
- obtain a survey to meet the requirements of the lending institution
✔✔When an essential element is missing in an agreement and the courts would not
hold it as a contract, then the agreement would be: - ✔✔Void
✔✔When one party could change their mind and exit a contract, it is said to be: -
✔✔Voidable
✔✔When one party may be in default but because of the nature of the agreement, the
damaged party would not have the ability to sue the other party in court, this is what
type of contract? - ✔✔Unenforceable
✔✔True or False: An important note regarding addenda is that any time one is attached
to the earnest money contract, the box referencing that addendum should be checked in
paragraph 22 of most promulgated contracts. If the addendum is not on the list, then it
should be written into the line that says "Other" and that box should be checked. -
✔✔True
✔✔If a contract has already been agreed to and both parties want to change some part
of it, it is best for a real estate professional to use an ______________________. -
✔✔Amendment
✔✔Any amendments must be in writing and signed by both parties to comply with the
_________________________. - ✔✔Statute of Frauds
