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

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