Real Estate 101 - Real Estate Principles » Fall 2021 » Chapter 6 Quiz

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Question #1
A provision in a contract stating the purchase depends on the buyer qualifying for a loan is called a:
A.   covenant.
B.   “subject to” provision or contingency clause.
C.   loan back-out clause.
D.   all answers are correct.
Question #2
When an existing contract is replaced with an entirely new contract, it is called:
A.   assignment.
B.   subordination.
C.   novation.
D.   rescission.
Question #3
Which of the following is a classification of a contract?
A.   Unenforceable
B.   Voidable
C.   Valid
D.   All answers are correct
Question #4
An assignment:
A.   is only for personal service.
B.   transfers a person’s right in a contract.
C.   transfers only liability.
D.   is a new contract.
Question #5
Which of the following is FALSE concerning purchase agreement contracts?
A.   They must be accompanied by a deposit of money or other items of value.
B.   An agent must give a copy to both buyer and seller.
C.   When acceptance is communicated to the buyer, it becomes a binding contract.
D.   Promissory notes and post-dated checks are never acceptable as consideration.
Question #6
Which of the following is FALSE concerning options?
A.   They have specific terms.
B.   They are granted in exchange for money.
C.   They have specific time periods.
D.   They can be revoked at any time by the optioner (seller), without penalty.
Question #7
Consideration can best be described as:
A.   anything of value.
B.   good will.
C.   money paid in a contract.
D.   not necessary in a valid contract.
Question #8
A remedy for breach can be:
A.   a unilateral rescission.
B.   an acceptance of breach.
C.   an action for damages.
D.   all answers are correct.
Question #9
What is always true about a counter offer?
A.   It is made by the seller.
B.   The previous offer is still valid.
C.   It is made by the buyer.
D.   It terminates the previous offer.
Question #10
The current award for liquidated damages on a purchase agreement form is a maximum of:
A.   133% of the home purchase price.
B.   13% of the home purchase price.
C.   33% of the home purchase price.
D.   3% of the home purchase price.
Question #11
A signed written contract takes precedence over oral agreements or prior written agreements based on:
A.   the performance rule.
B.   the statute of frauds.
C.   English common law.
D.   the parol evidence rule.
Question #12
If one of the parties doesn’t go through with a contract (nonperformance), it is called a(n):
A.   breach.
B.   operation of law.
C.   assignment.
D.   consideration.
Question #13
A written contract between two parties is:
A.   implied and bilateral.
B.   express and unilateral.
C.   express and bilateral.
D.   implied and unilateral.
Question #14
Any contract that can’t be performed within one year from the date of signing:
A.   must be in writing.
B.   is an example of duress.
C.   is a failure to perform.
D.   is illegal.
Question #15
Which of the following forms are part of CAR's® "Purchase Agreement Package"?
A.   Disclosure Regarding Real Estate Agency Relationship (AD)
B.   Buyer's Inspection Advisory (BIA)
C.   All answers are correct
D.   Wire Fraud and Electronic Funds Transfer Advisory (WFA)
Question #16
Which of the following is used to change the original terms of the purchase agreement?
A.   Substitution form
B.   Counter offer form
C.   Contingency form
D.   Covenant form
Question #17
An agreement that is made either verbally or in writing is known as a(n):
A.   express contract.
B.   implied contract.
C.   mutual consent.
D.   all of the above.
Question #18
If a contract is said to be “executory,” it:
A.   is court ordered.
B.   has been discharged or performed.
C.   has not yet been signed.
D.   has not yet been performed.
Question #19
Which of the following is NOT considered a basic element of a contract?
A.   capacity
B.   enforcement
C.   consideration
D.   Mutual consent

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