Texas Promulgated Contracts
Exam Questions and Answers
100% Pass
According to the Addendum for "Back-Up" Contract, when must the option
money be paid? - CORRECT ANSWER:-Upon execution
Real Estate Dealer's License Act (REDLA) - CORRECT ANSWER:-Passed in
1939, it required real estate agents to obtain licenses. It was changed to the Texas
Real Estate License Act in 1949
True or False: The seller would be the party of the first part and the buyer would
be the party of the second part. Any salesperson would be considered a third party
and regulated by the commission. - CORRECT ANSWER:-True
contract - CORRECT ANSWER:-A legal agreement between parties to do
(performance) or not to do (forbearance) a certain act for consideration.
Four elements of a contract: - CORRECT ANSWER:-Agreement
Consideration
Competent parties
,Legal objective
A contract for the purchase of ____________________ must be in writing to be
enforceable. - CORRECT ANSWER:-real estate
Contract law is based on the principle expressed in the Latin phrase "pacta sunt
servanda" loosely translated to ______________________. - CORRECT
ANSWER:-"agreements are to be kept"
To be of legal age in Texas, a person must be __________________, unless in the
military or married. - CORRECT ANSWER:-18 or older
True or False: A licensee should never try to make a determination if a person is
drunk or on drugs. The licensee could ask but could not deny the person if they
wanted to write an offer. This could put the licensee in the position of violating the
Federal Fair Housing Act or be a breach of his or her agency duties to the client. -
CORRECT ANSWER:-True
The Texas Real Estate Commission regulates a licensee __________________. -
CORRECT ANSWER:-In transactions in which the licensee is acting in a third-
party position.
Mutual assent - CORRECT ANSWER:-agreement to ALL the terms by ALL the
parties
The contract cannot contain: - CORRECT ANSWER:-Misrepresentation - an
error
,Fraud - intentional misrepresentation
Duress - use of force
Menace - threat of violence
Undue Influence - use of power
Consideration - CORRECT ANSWER:-something in exchange for something else
Two types of consideration: - CORRECT ANSWER:-1. Valuable consideration
(something of value)
2. Good consideration (love and affection)
True or False: Consideration must not be from the past - CORRECT ANSWER:-
True
Assignment - CORRECT ANSWER:-One of the parties to a contract may choose
to assign the contract to a third individual. For example, a law enforcement officer
does not want his or her name to appear in the public records so that the criminals
can shoot up his or her residence. For this reason, the police officer may create a
family trust before the closing and with assignment pass the title on to that trust.
No one, then, could locate the officer's home based upon a search of the public
records.
Novation - CORRECT ANSWER:-In this situation, the buyer and the seller had
an existing agreement and then because of additional information such as a home
inspector's report, new negotiations are entered into. The two parties wind up
, changing so much on the original document, it is easier to write a new contract and
put it in the place of the old one. The parties stay the same; it is just that now they
have a new agreement.
Open discussion - CORRECT ANSWER:-Is needed during a disagreement and
usually involves the parties sitting down with the broker and discussing the
situation.
Mediation - CORRECT ANSWER:-the third party mediator is simply a facilitator
attempting to keep both parties talking until they can reach a solution. Mediation is
non-binding
Arbitration - CORRECT ANSWER:-The arbitrator listens to both sides of the
situation and makes a decision. His or her decision is binding and court action
cannot be pursued.
Litigation - CORRECT ANSWER:-Is going to court and usually involves attorneys
and research. Litigation is almost always the most costly route and involves the
greatest time consumption.
An impartial third party appointed for dispute resolution services by a court or a
governmental body must have the following qualifications: - CORRECT
ANSWER:-- 40 classroom hours of approved training in dispute resolution
techniques
- for parent-child disputes, an additional 24 hours training in the fields of family
dynamics, child development, and family law
Exam Questions and Answers
100% Pass
According to the Addendum for "Back-Up" Contract, when must the option
money be paid? - CORRECT ANSWER:-Upon execution
Real Estate Dealer's License Act (REDLA) - CORRECT ANSWER:-Passed in
1939, it required real estate agents to obtain licenses. It was changed to the Texas
Real Estate License Act in 1949
True or False: The seller would be the party of the first part and the buyer would
be the party of the second part. Any salesperson would be considered a third party
and regulated by the commission. - CORRECT ANSWER:-True
contract - CORRECT ANSWER:-A legal agreement between parties to do
(performance) or not to do (forbearance) a certain act for consideration.
Four elements of a contract: - CORRECT ANSWER:-Agreement
Consideration
Competent parties
,Legal objective
A contract for the purchase of ____________________ must be in writing to be
enforceable. - CORRECT ANSWER:-real estate
Contract law is based on the principle expressed in the Latin phrase "pacta sunt
servanda" loosely translated to ______________________. - CORRECT
ANSWER:-"agreements are to be kept"
To be of legal age in Texas, a person must be __________________, unless in the
military or married. - CORRECT ANSWER:-18 or older
True or False: A licensee should never try to make a determination if a person is
drunk or on drugs. The licensee could ask but could not deny the person if they
wanted to write an offer. This could put the licensee in the position of violating the
Federal Fair Housing Act or be a breach of his or her agency duties to the client. -
CORRECT ANSWER:-True
The Texas Real Estate Commission regulates a licensee __________________. -
CORRECT ANSWER:-In transactions in which the licensee is acting in a third-
party position.
Mutual assent - CORRECT ANSWER:-agreement to ALL the terms by ALL the
parties
The contract cannot contain: - CORRECT ANSWER:-Misrepresentation - an
error
,Fraud - intentional misrepresentation
Duress - use of force
Menace - threat of violence
Undue Influence - use of power
Consideration - CORRECT ANSWER:-something in exchange for something else
Two types of consideration: - CORRECT ANSWER:-1. Valuable consideration
(something of value)
2. Good consideration (love and affection)
True or False: Consideration must not be from the past - CORRECT ANSWER:-
True
Assignment - CORRECT ANSWER:-One of the parties to a contract may choose
to assign the contract to a third individual. For example, a law enforcement officer
does not want his or her name to appear in the public records so that the criminals
can shoot up his or her residence. For this reason, the police officer may create a
family trust before the closing and with assignment pass the title on to that trust.
No one, then, could locate the officer's home based upon a search of the public
records.
Novation - CORRECT ANSWER:-In this situation, the buyer and the seller had
an existing agreement and then because of additional information such as a home
inspector's report, new negotiations are entered into. The two parties wind up
, changing so much on the original document, it is easier to write a new contract and
put it in the place of the old one. The parties stay the same; it is just that now they
have a new agreement.
Open discussion - CORRECT ANSWER:-Is needed during a disagreement and
usually involves the parties sitting down with the broker and discussing the
situation.
Mediation - CORRECT ANSWER:-the third party mediator is simply a facilitator
attempting to keep both parties talking until they can reach a solution. Mediation is
non-binding
Arbitration - CORRECT ANSWER:-The arbitrator listens to both sides of the
situation and makes a decision. His or her decision is binding and court action
cannot be pursued.
Litigation - CORRECT ANSWER:-Is going to court and usually involves attorneys
and research. Litigation is almost always the most costly route and involves the
greatest time consumption.
An impartial third party appointed for dispute resolution services by a court or a
governmental body must have the following qualifications: - CORRECT
ANSWER:-- 40 classroom hours of approved training in dispute resolution
techniques
- for parent-child disputes, an additional 24 hours training in the fields of family
dynamics, child development, and family law
