Unit 9

Question 1

1. A broker listed a property and shortly thereafter discovered that the client had been previously declared mentally incompetent by the court. The listing is now
   a. binding as the broker was acting in good faith.
   b. voidable by the seller.
   c. voidable by the broker.
   d. void.

Answer 1

d. void.

Question 2

2. A void contract is one that is
   a. not in writing.
   b. not legally enforceable.
   c. rescindable by agreement.
   d. voidable by only one of the parties.

Answer 2

b. not legally enforceable.

Question 3

3. The legal remedy to enforce the terms of a contract is known as
   a. an injunction.
   b. a lis pendens.
   c. a writ of attachment.
   d. specific performance.

Answer 3

d. specific performance.

Question 4

4. The essential elements of any type of contract include all of the following EXCEPT
   a. offer and acceptance.
   b. agency disclosure.
   c. competent parties.
   d. legal consideration.

Answer 4

b. agency disclosure.

Question 5

5. If the seller makes a counteroffer to an offer to purchase received on his property, the prospective buyer is
   a. bound by the original offer.
   b. bound to accept the counteroffer.
   c. bound by whichever offer price is lower.
   d. relieved of all offer obligations.

Answer 5

d. relieved of all offer obligations.

Question 6

6. A written real estate contract is presumed to be the complete agreement of the parties to a contract because of the
   a. doctrine of caveat emptor.
   b. statute of frauds.
   c. parol evidence rule.
   d. statute of limitations.

Answer 6

c. parol evidence rule.

Question 7

7. Which of the following gives the BEST evidence of the buyer’s intention to carry out the terms of the real estate purchase contract?
   a. The “subject to” clause
   b. The agreement to seek mortgage financing
   c. The earnest money deposit
   d. The provision that “time is of the essence”

Answer 7

c. The earnest money deposit

Question 8

8. The term rescission is best defined as a
   a. change.
   b. cancellation.
   c. substitution.
   d. subordination.

Answer 8

b. cancellation.

Question 9

9. All of the following are essential to the formation of a contract EXCEPT
   a. offer.
   b. acceptance.
   c. consideration.
   d. performance.

Answer 9

d. performance.

Question 10

10. A bilateral contract is one in which
    a. only one of the parties is obligated to act.
    b. the promise of one party is given in exchange for the promise of the other party.
    c. some act is to be performed by one party only.
    d. a restriction is placed in the contract by one party to limit the performance by the other.

Answer 10

b. the promise of one party is given in exchange for the promise of the other party.

Question 11

11. A listing broker schedules an appointment to present a purchase offer to the seller. The seller has serious health problems and her son is attending to her healthcare. When the broker arrives, he finds the seller’s son and daughter-in-law present. In the broker’s presence, both persistently urge the seller to accept the offer. The seller is reluctant to accept, since the offer is substantially less than the list price. If the seller accepts the offer under these circumstances, she may later claim that
    a. the broker should not have brought such a low offer for her property.
    b. she was under undue influence from her son and daughter-in-law, and therefore, the contract is voidable.
    c. the broker defrauded her by allowing her son and his wife to see the offer he brought to her.
    d. her consumer protection rights under anti-trust laws were violated by her son and daughter-in-law.

Answer 11

b. she was under undue influence from her son and daughter-in-law, and therefore, the contract is voidable.

Question 12

12. The law requiring real estate contracts be in writing to be enforceable is the
    a. writ of attachment.
    b. statute of frauds.
    c. statute of limitations.
    d. parol evidence rule.

Answer 12

b. statute of frauds.

Question 13

13. If the seller breaches a purchase contract, the buyer may do all of the following EXCEPT
    a. sue the seller for specific performance.
    b. void the contract and recover the earnest money.
    c. sue the seller for damages.
    d. sue the buyer’s broker for nonperformance.

Answer 13

d. sue the buyer’s broker for nonperformance.

Question 14

14. The Uniform Electronic Transaction Act (UETA)
    a. is not applicable to real estate transactions.
    b. states that electronic signatures are binding on contract parties.
    c. deals with verbal contracts.
    d. states that conveyance of title must be writing.

Answer 14

b. states that electronic signatures are binding on contract parties.