AYPO REAL ESTATE LAW OF
CONTRACTS FINAL EXAM REVIEW
QUESTIONS AND CORRECT
SOLUTIONS
Which form of these lease types is focused primarily on commercial lessees?
ANSW✅✅Percentage lease
A tenant abandoning a leased property without providing proper notice or doing so under a
previously negotiated reason, is not released from their obligations. ANSW✅✅TRUE
What type of contracts are options generally considered to be? ANSW✅✅Unilateral
A contract for deed is also known as: ANSW✅✅1. Installment sales contract
2. Real estate contract
An advantage to buyers in a lease-purchase option is that: ANSW✅✅It can be easier to get a
difficult to qualify buyer into a home with a lower down payment.
The real estate sales contract becomes an offer as soon as: ANSW✅✅It has been prepared and
signed by the purchaser.
At what point has an acceptance of an offer been completed? ANSW✅✅Once the offeror has
been notified of the offeree's acceptance.
A __________ clause states that a contract remains valid even if one provision of the contract is
rendered invalid. ANSW✅✅Severability
Which of these IS NOT one of the major types of REITs? ANSW✅✅Commercial
Buyer's agents aware of a "stigma." i.e., psychologically impactful event, on a property are required
to disclose the stigma. ANSW✅✅FALSE
, Buyer A purchases home from Seller B, but the home burns down the week before closing - the
cause a cigarette dropped by A during a walk-through. As a result: ANSW✅✅A likely is obligated
to complete the purchase because the damage was A's fault.
Which of these IS NOT listed as a potential damages item for wrongfully failing or refusing to sign a
release acceptable to the escrow agent within 7 days of receipt of the request? ANSW✅✅Broker's
fees
In what instances may parol (oral) evidence be used to dispute a contractual obligation?
ANSW✅✅When a party made promises that they never intended to fulfill but used to induced the
other party to sign the contract
Which of these is not a common defense to breach of contract? ANSW✅✅Novation
Damages that are accounted for in advance by agreeing to a specific amount of compensation
should the anticipated event occur, are referred to as: ANSW✅✅Liquidated damages
A "cloud" on a title means: ANSW✅✅There is a possibility of another person or entity having a
claim on the property.
An amendment must always reference: ANSW✅✅1. The original contract.
2. Names of the parties.
3. Dates of ratification.
Promulgated addenda forms may be found in Paragraph 22 of which addendum form?
ANSW✅✅One to Four Family Residential Contract (Resale)
The major distinction between "lien theory" and "title theory" states is: ANSW✅✅in lien theory
states, the borrower holds title, and in title theory states, the lender holds the title.
Hypothecation is: ANSW✅✅The process of a buyer signing a promissory note to repay a debt and
the lender taking an underlying equitable right in the property.
CONTRACTS FINAL EXAM REVIEW
QUESTIONS AND CORRECT
SOLUTIONS
Which form of these lease types is focused primarily on commercial lessees?
ANSW✅✅Percentage lease
A tenant abandoning a leased property without providing proper notice or doing so under a
previously negotiated reason, is not released from their obligations. ANSW✅✅TRUE
What type of contracts are options generally considered to be? ANSW✅✅Unilateral
A contract for deed is also known as: ANSW✅✅1. Installment sales contract
2. Real estate contract
An advantage to buyers in a lease-purchase option is that: ANSW✅✅It can be easier to get a
difficult to qualify buyer into a home with a lower down payment.
The real estate sales contract becomes an offer as soon as: ANSW✅✅It has been prepared and
signed by the purchaser.
At what point has an acceptance of an offer been completed? ANSW✅✅Once the offeror has
been notified of the offeree's acceptance.
A __________ clause states that a contract remains valid even if one provision of the contract is
rendered invalid. ANSW✅✅Severability
Which of these IS NOT one of the major types of REITs? ANSW✅✅Commercial
Buyer's agents aware of a "stigma." i.e., psychologically impactful event, on a property are required
to disclose the stigma. ANSW✅✅FALSE
, Buyer A purchases home from Seller B, but the home burns down the week before closing - the
cause a cigarette dropped by A during a walk-through. As a result: ANSW✅✅A likely is obligated
to complete the purchase because the damage was A's fault.
Which of these IS NOT listed as a potential damages item for wrongfully failing or refusing to sign a
release acceptable to the escrow agent within 7 days of receipt of the request? ANSW✅✅Broker's
fees
In what instances may parol (oral) evidence be used to dispute a contractual obligation?
ANSW✅✅When a party made promises that they never intended to fulfill but used to induced the
other party to sign the contract
Which of these is not a common defense to breach of contract? ANSW✅✅Novation
Damages that are accounted for in advance by agreeing to a specific amount of compensation
should the anticipated event occur, are referred to as: ANSW✅✅Liquidated damages
A "cloud" on a title means: ANSW✅✅There is a possibility of another person or entity having a
claim on the property.
An amendment must always reference: ANSW✅✅1. The original contract.
2. Names of the parties.
3. Dates of ratification.
Promulgated addenda forms may be found in Paragraph 22 of which addendum form?
ANSW✅✅One to Four Family Residential Contract (Resale)
The major distinction between "lien theory" and "title theory" states is: ANSW✅✅in lien theory
states, the borrower holds title, and in title theory states, the lender holds the title.
Hypothecation is: ANSW✅✅The process of a buyer signing a promissory note to repay a debt and
the lender taking an underlying equitable right in the property.
