Texas Promulgated Forms - Real Estate Exam Questions and 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 Competent Parties - Answer- a person who is at least 18 years old, sane, and sober Consideration - Answer- Something, usually money, is being given in exchange for something else Mutual Agreement (Mutual Assent) - Answer- parties must enter the contract freely and voluntarily Lawful Objective - Answer- Concerns the provisions of an agreement, which must call for lawful activity. A provision that does not comply with federal, state, or local law cannot be upheld by a court. Statute of Frauds - Answer- requires that, to be enforceable, all agreements affecting title to or interest in real estate in Texas be in writing and signed by the parties Legal description - Answer- (1) reference to a recorded plat (lot, block, section number, subdivision name) (2) metes and bounds Void Contract - Answer- Not a contract at all; void means the absence of something Unenforceable contract - Answer- An agreement that had all six elements at the time it became an executory contract but, due to a change in conditions, no longer meets the requirements of law and no longer can be upheld by a court Voidable Contract - Answer- Set aside at the option of one of the contracting parties. Examples: entered into with a minor; Fraudulent; missing written consent Executory contract - Answer- An enforceable contract that is in the process of being performed or fulfilled, once fufilled it becomes an Executed Contract Executed (enforcable) Contract - Answer- When closing and funding occur, all parties have fulfilled all promises made in agreement, and deed has been delivered