Texas Promulgated Forms Exam Questions with Verified Answers

The six elements of a valid real estate contract: - Answer-Competent parties Consideration Mutual agreement (mutual assent) Lawful objective In writing and signed by the parties Contain a legal description Equitable Owner - Answer-Buyer has equitable title and is known as the owner in equity or equitable owner Voidable Contrasts can include: - Answer-- Minor - Seller Disclosure - Fraud - Association Documents - MUD Bilateral Contract - Answer-A promise in exchange for a promise Unilateral Contract - Answer-A promise in exchange for an act An independent contractor agreement is an example of a unilateral agreement. True False - Answer-false. An independent contractor agreement is a bilateral agreement; it defines the working relationship between sales associate and sponsoring broker. All six promulgated contract forms include "time is of the essence." True False - Answer-true. The six promulgated contract forms and four addenda include "time is of the essence": Addendum for Sale of Other Property by Buyer, Addendum for Back-Up Contract, Third Party Financing Addendum, and Short Sale Addendum. The statute of limitations requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable. True False - Answer-false. The statute of frauds requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable. Even if a nonbreaching party to a contract accepts earnest money as liquidated damages, that party can still sue for damages.