Comprehensive Study 1 Up to Date Content
National Test - Real Estate
Contracts and Agency Latest
Questions and Graded Answers
Contracts can be express or implied
Ans: An express contract is written or stated.
Examples: a written sales contract, a verbal lease
agreement, a written listing, a verbal buyer
representation agreement.
An implied contract is by actions or evidence. This
agreement is neither written nor discussed. It is
simply performed.
Contracts can be unilateral or bilateral.
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,Comprehensive Study 2 Up to Date Content
Ans: A unilateral contract binds only one party. An
"If... then..." contract is unilateral.
An option contract is the right to purchase property
within a definite time period at a definite price.
There is no obligation to the purchaser to buy, but
the seller is obligated to sell. Only one party makes a
promise - the seller. Only one party can be sued - the
seller. The option fee goes directly to the seller. To
extend an option, the buyer would need to pay an
added fee. When an option is exer- cised the
unilateral contract becomes bilateral.
A bilateral contract is an exchange of promises,
which binds both parties. A sales contract is a
bilateral contract. Both parties make promises and
either or both can be sued.
REQUIRED ELEMENTS OF A CONTRACT
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, Comprehensive Study 3 Up to Date Content
Ans: In real estate, the contract is a written promise
to pay, by the buyer, and a written promise to deliver
a deed, by the seller. A properly prepared contract
commits both parties to its terms. To be valid and
enforceable, the contract must have the following:
(COLIC)
1. Competent parties - sane, sober, consenting adults
2. Offer and acceptance (mutual agreement, or
mutual consent) without qualifications
3. Legal purpose - also called legality of object
4. In writing - (Statute of Frauds)
5. Consideration - (Not earnest money) - something of
value (payment or a promise) in exchange for what is
being offered.
Without #4 above, the contract would be valid, but
not enforceable.
Executed vs. Executory Contract
Ans: The term executed, or the phrase fully executed
is used when all the terms and conditions of the
contract have been met and carried out. It is
considered performed or discharged.
A contract that is signed, but not yet carried out is
called an executory contract.
Valid vs. Void Contracts
Up to Date Content
National Test - Real Estate
Contracts and Agency Latest
Questions and Graded Answers
Contracts can be express or implied
Ans: An express contract is written or stated.
Examples: a written sales contract, a verbal lease
agreement, a written listing, a verbal buyer
representation agreement.
An implied contract is by actions or evidence. This
agreement is neither written nor discussed. It is
simply performed.
Contracts can be unilateral or bilateral.
Up to Date Content
,Comprehensive Study 2 Up to Date Content
Ans: A unilateral contract binds only one party. An
"If... then..." contract is unilateral.
An option contract is the right to purchase property
within a definite time period at a definite price.
There is no obligation to the purchaser to buy, but
the seller is obligated to sell. Only one party makes a
promise - the seller. Only one party can be sued - the
seller. The option fee goes directly to the seller. To
extend an option, the buyer would need to pay an
added fee. When an option is exer- cised the
unilateral contract becomes bilateral.
A bilateral contract is an exchange of promises,
which binds both parties. A sales contract is a
bilateral contract. Both parties make promises and
either or both can be sued.
REQUIRED ELEMENTS OF A CONTRACT
Up to Date Content
, Comprehensive Study 3 Up to Date Content
Ans: In real estate, the contract is a written promise
to pay, by the buyer, and a written promise to deliver
a deed, by the seller. A properly prepared contract
commits both parties to its terms. To be valid and
enforceable, the contract must have the following:
(COLIC)
1. Competent parties - sane, sober, consenting adults
2. Offer and acceptance (mutual agreement, or
mutual consent) without qualifications
3. Legal purpose - also called legality of object
4. In writing - (Statute of Frauds)
5. Consideration - (Not earnest money) - something of
value (payment or a promise) in exchange for what is
being offered.
Without #4 above, the contract would be valid, but
not enforceable.
Executed vs. Executory Contract
Ans: The term executed, or the phrase fully executed
is used when all the terms and conditions of the
contract have been met and carried out. It is
considered performed or discharged.
A contract that is signed, but not yet carried out is
called an executory contract.
Valid vs. Void Contracts
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