Laws of Contract Test: Questions & Answers
1. Which of the following requires a contract for the conveyance of real estate to be in writing to be
enforceable? - ANSWER:Statue of Frauds
2. The TREC residential contract forms - ANSWER:are drafted by the Broker Lawyer Committee
3. An option contract is - ANSWER:a unilateral contract
4. In a lease with a "right of first refusal" provision - ANSWER:the tenant has the right to match or better
any offer the landlord receives to prevent the property from being sold to someone else
5. If a broker receives more than one offer on a property - ANSWER:all must be presented to the seller
unless the seller has instructed the broker otherwise
6. A counteroffer is - ANSWER:a rejection, a new offer, able to be withdrawn prior to acceptance
7. If a buyer defaults on a contract and the seller chooses to keep the deposits, this is an example of -
ANSWER:accepting liquidated damages
8. Freehold estate usually include - ANSWER:surface, subsurface, and air rights
9. A written history of all instruments and happenings that may affect the title is called - ANSWER:an
abstract of title
10. RESPA regulates the closing on - ANSWER:1-4 family residential properties with federally related
financing
11. Rule P-53 of the Texas Department of Insurance states that Title Companies - ANSWER:cannot
provide food and beverages for a picnic for a single firm, can't provide an annual party for a single firm,
can't provide continuing education classes unless they charge the market rate for those classes
12. The most common form of financing used by buyers is - ANSWER:third party financing
13. If the loan factor is $5.53 on a $200,000 loan, taxes are $2400/year and insurance is $1800/year,
what is the monthly PITI payment? - ANSWER:$1456
14. "Days" in all TREC contracts and forms refers to - ANSWER:calendar days
15. Texas Veteran's Housing Assistance Program loans can be - ANSWER:FHA, VA, Conventional
16. An offer by a prospective purchaser can be terminated prior to acceptance due to -
ANSWER:expiration of a specified time period, bankruptcy of either party, a change in the law that
renders the contract illegal
17. Buyers and sellers in the contract should be identified by their - ANSWER:legal names
18. Issues relating to community property and homestead - ANSWER:are determined by the title
company
1. Which of the following requires a contract for the conveyance of real estate to be in writing to be
enforceable? - ANSWER:Statue of Frauds
2. The TREC residential contract forms - ANSWER:are drafted by the Broker Lawyer Committee
3. An option contract is - ANSWER:a unilateral contract
4. In a lease with a "right of first refusal" provision - ANSWER:the tenant has the right to match or better
any offer the landlord receives to prevent the property from being sold to someone else
5. If a broker receives more than one offer on a property - ANSWER:all must be presented to the seller
unless the seller has instructed the broker otherwise
6. A counteroffer is - ANSWER:a rejection, a new offer, able to be withdrawn prior to acceptance
7. If a buyer defaults on a contract and the seller chooses to keep the deposits, this is an example of -
ANSWER:accepting liquidated damages
8. Freehold estate usually include - ANSWER:surface, subsurface, and air rights
9. A written history of all instruments and happenings that may affect the title is called - ANSWER:an
abstract of title
10. RESPA regulates the closing on - ANSWER:1-4 family residential properties with federally related
financing
11. Rule P-53 of the Texas Department of Insurance states that Title Companies - ANSWER:cannot
provide food and beverages for a picnic for a single firm, can't provide an annual party for a single firm,
can't provide continuing education classes unless they charge the market rate for those classes
12. The most common form of financing used by buyers is - ANSWER:third party financing
13. If the loan factor is $5.53 on a $200,000 loan, taxes are $2400/year and insurance is $1800/year,
what is the monthly PITI payment? - ANSWER:$1456
14. "Days" in all TREC contracts and forms refers to - ANSWER:calendar days
15. Texas Veteran's Housing Assistance Program loans can be - ANSWER:FHA, VA, Conventional
16. An offer by a prospective purchaser can be terminated prior to acceptance due to -
ANSWER:expiration of a specified time period, bankruptcy of either party, a change in the law that
renders the contract illegal
17. Buyers and sellers in the contract should be identified by their - ANSWER:legal names
18. Issues relating to community property and homestead - ANSWER:are determined by the title
company
