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.   “subject to” provision or contingency clause.
B.   all answers are correct.
C.   loan back-out clause.
D.   covenant.
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.   Voidable
B.   All answers are correct
C.   Valid
D.   Unenforceable
Question #4
An assignment:
A.   is a new contract.
B.   is only for personal service.
C.   transfers only liability.
D.   transfers a person’s right in a contract.
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.   They must be accompanied by a deposit of money or other items of value.
D.   An agent must give a copy to both buyer and seller.
Question #6
Which of the following is FALSE concerning options?
A.   They are granted in exchange for money.
B.   They can be revoked at any time by the optioner (seller), without penalty.
C.   They have specific time periods.
D.   They have specific terms.
Question #7
Consideration can best be described as:
A.   good will.
B.   anything of value.
C.   money paid in a contract.
D.   not necessary in a valid contract.
Question #8
A remedy for breach can be:
A.   an action for damages.
B.   a unilateral rescission.
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.   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.   3% of the home purchase price.
B.   13% of the home purchase price.
C.   33% 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.   the statute of frauds.
B.   the parol evidence rule.
C.   English common law.
D.   the performance rule.
Question #12
If one of the parties doesn’t go through with a contract (nonperformance), it is called a(n):
A.   consideration.
B.   assignment.
C.   operation of law.
D.   breach.
Question #13
A written contract between two parties is:
A.   express and unilateral.
B.   express and bilateral.
C.   implied and bilateral.
D.   implied and unilateral.
Question #14
Any contract that can’t be performed within one year from the date of signing:
A.   is an example of duress.
B.   is a failure to perform.
C.   is illegal.
D.   must be in writing.
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.   Disclosure Regarding Real Estate Agency Relationship (AD)
C.   All answers are correct
D.   Buyer's Inspection Advisory (BIA)
Question #16
Which of the following is used to change the original terms of the purchase agreement?
A.   Covenant form
B.   Substitution form
C.   Contingency form
D.   Counter offer form
Question #17
An agreement that is made either verbally or in writing is known as a(n):
A.   implied contract.
B.   express contract.
C.   mutual consent.
D.   all of the above.
Question #18
If a contract is said to be “executory,” it:
A.   has not yet been signed.
B.   has not yet been performed.
C.   is court ordered.
D.   has been discharged or performed.
Question #19
Which of the following is NOT considered a basic element of a contract?
A.   Mutual consent
B.   consideration
C.   capacity
D.   enforcement

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