Chapter 2

Question 1

The main law that governs the real estate industry

Answer 1

Texas Real Estate License Act

Question 2

Licensees are also prohibited from

Answer 2

1. Practicing law
2. Offering, giving or attempting to give legal advice, directly or indirectly.
3. Giving advice or opinions as to the legal effect of any contracts or other such instruments which may affect the title to real estate.
4. Giving opinions concerning the status or validity of title to real estate.
5. Attempting to prevent or in any manner whatsoever discourage any principal to a real estate transaction from employing a lawyer.
   6.Licensees are prohibited from hiring an attorney to represent the buyer or the seller.

Question 3

Broker-Lawyer Committee

Answer 3

The purpose of this committee is to draft and revise contracts and forms for use by agents.
When a need arises for a form to be created or changed, the Broker-Lawyer Committee develops the wording necessary for the document.

Question 4

members on the Broker-Lawyer Committee

Answer 4

1. Six lawyers appointed by the president of the state bar of Texas.
2. Six real estate brokers appointed by the Texas Real Estate Commission.
3. One public member who is appointed by the governor.

Question 5

What are unilateral Mistakes ?

Answer 5

are errors in wording, law, or fact that are held by only one party and not the other. These mistakes are more common than others and usually mean that one party is mistaken about the subject matter or terms contained in a contract.

Question 6

How court remedy unilateral mistakes ?

Answer 6

1. Rescission: which completely cancels a contract and restores parties to the previous positions.
2. Reformation: where an agreement is changed to reflect the parties’ original understanding.

Question 7

zipForm

Answer 7

Forms may also be obtained through the use of several available software programs. Members of Texas REALTORS® will most likely use zipForm, which comes with membership in Texas REALTORS®.

Question 8

Section 1101.652(a)(8)

Answer 8

“The commission may suspend or revoke a license issued under this chapter or take other disciplinary action authorized by this chapter if the license holder fails to use a contract form required by the commission under Section 1101.155.”

Question 9

when an offer becomes a contract ?

Answer 9

when the last initials and signatures are placed by both parties and both sides have been notified.

Question 10

The owner has 4 ways they can respond to the offer ?

Answer 10

1. The offer can be accepted which would make the offer a contract.
2. The offer could be rejected.
   3.The owner will make a counteroffer.
   4.The sellers could fail to act as long as the other side allows it.

Question 11

Price fixing

Answer 11

When two or more real estate brokers conspire together to charge the same commissions.

Question 12

Boycotting

Answer 12

The active elimination of a third person or group from participating in free commerce.

Question 13

Promulgated form

Answer 13

A form which was formally made public or created and mandated by TREC and is to be used by licensees for the specific purpose intended, unless there is an exception of when you do not have to use the form.

Question 14

Unilateral mistake

Answer 14

An error that is held by only one party.

Question 15

Reformation

Answer 15

1. When written agreement is changed to reflect party’s original understanding. (rewritten)
2. it is granted only if one party was not aware that the writing does not conform to the actual agreement.