PROMULGATED CONTRACTS
QUESTIONS AND ANSWERS GRADED
A+.
Contract: - correct answer. A legally binding and enforceable agreement to do or not
to do a specific thing
Promulgated Contract: - correct answer. A contract that has been approved and is
required to be used by license holders
In Texas, what are the two entities that promulgate contracts? - correct answer.
TREC and TAR
In a real estate sale, the license holder must use the appropriate TREC-promulgated
form UNLESS another contract form is required by the buyer's lender. - correct answer.
FALSE
(Explanation: In a real estate sale, the license holder must use the appropriate TREC-
promulgated form UNLESS another contract form is required by the property owner.
The buyer's lender has no influence over the sales contracts used in a transaction.)
A license holder should ___________. - correct answer. disclose all material facts to
the client
Legally Competent: - correct answer. When an individual has reached the age of
majority (18 years of age) and has not been declared mentally incompetent by a judge
Void Contract: - correct answer. A contract that has no legal effect
Voidable Contract: - correct answer. When one or more of the parties has the
authority to rescind the contract
Consideration: - correct answer. A valuable item that each party exchanges in order
to demonstrate that they agree to the contract terms
,Which of the following is TRUE of mutual agreement? - correct answer. There
cannot be mistakes in the terms and conditions
All of the following are essential elements of a valid contract EXCEPT: - correct
answer. earnest money
What is NOT an element of a valid contract? - correct answer. earnest money
A law that requires real estate contracts to be in writing is the ______. - correct answer.
statute of Frauds
Valid Contract: - correct answer. Legal agreement meeting all the essential, basic
requirements of the law
Unenforceable Contract: - correct answer. A contract that cannot be enforced by the
courts
5 essential elements of a valid contract: - correct answer. 1.Mutual assent (100%
agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
If two people have a contract for one to sell illegal drugs to the other, the contract would
be: - correct answer. Void
A contract that cannot be enforced by the courts is _____. - correct answer.
unenforceable
Executory Contract: - correct answer. A contract that is not completely executed or
performed
Executed Contract: - correct answer. A contract in which all terms have been fulfilled
by all parties
A contract that is "pending" is __________________. - correct answer. executory
The difference between an executory contract and an executed contract is that the
executed contract is _____. - correct answer. closed
The best way for any contract to terminate is to become _________________. - correct
answer. executed
According to Texas state law, a contract for deed and a lease with an option to buy are
considered ___________. - correct answer. executory contracts
, Bilateral Contract: - correct answer. A contract in which one party must promise to
do something for another party and that party must promise to do something for the first
party
Unilateral Contract: - correct answer. A contract made between two or more parties
in which only one of those parties makes a promise or otherwise accepts an obligation
An option to buy contract is a(n)_________________. - correct answer. Unilateral
Contract
Which of the following is a bilateral contract? - correct answer. leases
If a contract says "time is of the essence," that means that it is due: - correct answer.
as soon as possible
By whom should the language "time of the essence" be added? - correct answer. an
attorney
Addenda: - correct answer. Materials added to and included in the initial contract
that provide more information on the transaction
Amendment: - correct answer. Items that are attached to the original document and
should never be changed after the document has been signed and accepted
When filling out the nine checkable box options on the Amendment to Contract form,
more than one box can be checked. - correct answer. TRUE
In which situation would an amendment go into effect? - correct answer. the parties
sign to amendment
TREC promulgated addenda are added to the contract AFTER it has been signed. -
correct answer. FALSE
(Explanation: Addenda are added to the contract BEFORE the contract has been
signed. Amendments are added afterwards.)
Performance: - correct answer. The responsibility of all the parties to carry out their
part of a contract
Quitclaim Deed: - correct answer. Transfers ownership of whatever the grantor
owns but make no guarantee of ownership and no promise to defend
Novation: - correct answer. The substitution of a new contract for an existing
contract, relieves the original party of liability
QUESTIONS AND ANSWERS GRADED
A+.
Contract: - correct answer. A legally binding and enforceable agreement to do or not
to do a specific thing
Promulgated Contract: - correct answer. A contract that has been approved and is
required to be used by license holders
In Texas, what are the two entities that promulgate contracts? - correct answer.
TREC and TAR
In a real estate sale, the license holder must use the appropriate TREC-promulgated
form UNLESS another contract form is required by the buyer's lender. - correct answer.
FALSE
(Explanation: In a real estate sale, the license holder must use the appropriate TREC-
promulgated form UNLESS another contract form is required by the property owner.
The buyer's lender has no influence over the sales contracts used in a transaction.)
A license holder should ___________. - correct answer. disclose all material facts to
the client
Legally Competent: - correct answer. When an individual has reached the age of
majority (18 years of age) and has not been declared mentally incompetent by a judge
Void Contract: - correct answer. A contract that has no legal effect
Voidable Contract: - correct answer. When one or more of the parties has the
authority to rescind the contract
Consideration: - correct answer. A valuable item that each party exchanges in order
to demonstrate that they agree to the contract terms
,Which of the following is TRUE of mutual agreement? - correct answer. There
cannot be mistakes in the terms and conditions
All of the following are essential elements of a valid contract EXCEPT: - correct
answer. earnest money
What is NOT an element of a valid contract? - correct answer. earnest money
A law that requires real estate contracts to be in writing is the ______. - correct answer.
statute of Frauds
Valid Contract: - correct answer. Legal agreement meeting all the essential, basic
requirements of the law
Unenforceable Contract: - correct answer. A contract that cannot be enforced by the
courts
5 essential elements of a valid contract: - correct answer. 1.Mutual assent (100%
agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
If two people have a contract for one to sell illegal drugs to the other, the contract would
be: - correct answer. Void
A contract that cannot be enforced by the courts is _____. - correct answer.
unenforceable
Executory Contract: - correct answer. A contract that is not completely executed or
performed
Executed Contract: - correct answer. A contract in which all terms have been fulfilled
by all parties
A contract that is "pending" is __________________. - correct answer. executory
The difference between an executory contract and an executed contract is that the
executed contract is _____. - correct answer. closed
The best way for any contract to terminate is to become _________________. - correct
answer. executed
According to Texas state law, a contract for deed and a lease with an option to buy are
considered ___________. - correct answer. executory contracts
, Bilateral Contract: - correct answer. A contract in which one party must promise to
do something for another party and that party must promise to do something for the first
party
Unilateral Contract: - correct answer. A contract made between two or more parties
in which only one of those parties makes a promise or otherwise accepts an obligation
An option to buy contract is a(n)_________________. - correct answer. Unilateral
Contract
Which of the following is a bilateral contract? - correct answer. leases
If a contract says "time is of the essence," that means that it is due: - correct answer.
as soon as possible
By whom should the language "time of the essence" be added? - correct answer. an
attorney
Addenda: - correct answer. Materials added to and included in the initial contract
that provide more information on the transaction
Amendment: - correct answer. Items that are attached to the original document and
should never be changed after the document has been signed and accepted
When filling out the nine checkable box options on the Amendment to Contract form,
more than one box can be checked. - correct answer. TRUE
In which situation would an amendment go into effect? - correct answer. the parties
sign to amendment
TREC promulgated addenda are added to the contract AFTER it has been signed. -
correct answer. FALSE
(Explanation: Addenda are added to the contract BEFORE the contract has been
signed. Amendments are added afterwards.)
Performance: - correct answer. The responsibility of all the parties to carry out their
part of a contract
Quitclaim Deed: - correct answer. Transfers ownership of whatever the grantor
owns but make no guarantee of ownership and no promise to defend
Novation: - correct answer. The substitution of a new contract for an existing
contract, relieves the original party of liability
