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Texas Law of Contracts > Chapter 2 > Flashcards

Chapter 2 Flashcards

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1
Q

What is the purpose of TRELA (Texas Real Estate License Act)?

A

To protect the public

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2
Q

What does Article 13 of the National Association of Realtors Code of Ethics state?

A

Realtors shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.

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3
Q

Who is intended for use of TREC contract forms?

A

Licensed real estate brokers and salespersons trained in their correct use.

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4
Q

What can result from mistakes in the use of a TREC form?

A

Financial loss or a contract which is unenforceable.

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5
Q

Why would TREC suspend or revoke the license or certificate of registration of a license or certificate holder who is not a licensed attorney?

A

Drafting an instrument that transfers or affects an interest in real property or advises a person regarding the validity or legal sufficiency of an instrument or the validity of title to real property.

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6
Q

What does “Pecuniary” refer to?

A

Something measured in money.

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7
Q

What is an “Instrument”?

A

A document such as a contract or deed

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8
Q

What does “Notwithstanding” replace in context?

A

Despite

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9
Q

A real estate license holder in Texas is not practicing law IF he or she is brokering a transaction where one of these three contracts are used:

A

1) TREC promulgated forms, 2) Forms prepared by a Texas attorney and approved by TREC for licensee use, 3) Forms prepared by property owners or by their attorney.

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10
Q

What does the Texas Administrative Code (TAC) contain?

A

Rules and regulations set down by various commissions and agencies of the state, in addition to statutes regulation real estate license holders.

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11
Q

Where are the TREC rules found in the Texas Administrative Code (TAC)?

A

Chapter 537

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12
Q

When negotiating contracts binding the sale, exchange, option, lease, or rental of any interest in real property, a licensee shall use only forms promulgated by TREC with these exceptions:

A

1) transactions in which the licensee is functioning solely as a principal, not as an agent 2) transactions in which an agency of the US government requires a different form to be used 3)transactions for which a contract form has been prepared by the property owner or an attorney and required by the property owner 4) transactions for which no standard contract has been promulgated and the licensee uses a form prepared by an attorney or a form created by the Texas Real Estate Broker-Lawyer Committee and made available for trial use by licensees.

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13
Q

True or False: A real estate broker or salesperson must never state an opinion as to who has rights of ownership to any form of real property.

A

True

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14
Q

What actions, if done to a contract by a licensee, would be construed as the licensee acting as an attorney?

A

Drawing lines through words or crossing out portions of the contract or advising clients to do so; adding words, phrases, or sentences to the contract.

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15
Q

What is the best practice to follow if a party to the contract wishes to add, delete, or write something in the contract?

A

Let the party or his attorney actually do the writing or change in the form.

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16
Q

Where is the licensee able to add factual statements or business details in the contract?

A

The Special Provisions paragraph.

17
Q

What is a customary trait of a commercial real estate sale or lease?

A

Both buyers and sellers, tenants and landlords will have legal counsel throughout the transaction.

18
Q

What is the Broker-Lawyer Committee?

A

A committee of both lawyers and brokers operating according to TRELA and under the jurisdiction of TREC, who drafts standardized forms to be used by Realtors without the danger of unauthorized practice of law.

19
Q

What is the membership makeup of the Broker-Lawyer Committee?

A

6 members appointed by TREC, 6 members of the State Bar of Texas appointed by the president of the state bar, 1 public member appointed by the governor.

20
Q

What qualifications must the 6 members appointed to the Broker-Lawyer Committee by TREC have?

A

They must be brokers with certain experience qualifications.

21
Q

What qualifications must the 6 members of the Broker-Lawyer Committee appointed by the State Bar have?

A

The must have contracts and/or real estate specialties.

22
Q

What does “promulgate” mean in real estate context?

A

To put into force under the law.

23
Q

What is the difference in what the Broker-Lawyer Committee and TREC does to contracts?

A

Broker-Lawyer Committee drafts the contracts, TREC approves and promulgates the contracts for use by licensees.

24
Q

True or False: TREC promulgated contract forms are available for use by the general public.

A

True

25
Q

What is the definition of fraud?

A

An act of deception which was done deliberately by someone to get an unfair advantage over someone else.

26
Q

How is “misrepresentation” created?

A

When a licensee makes a misleading or false statement that was accepted as fact from a customer or client and the person was damaged by relying on that information.

27
Q

True or False: Licensees should not rely on any information gained from the internet concerning a property.

A

True

28
Q

What is the Deceptive Trade Practices Act (DTPA)?

A

A federal law (which has a Texas version) that watches over business, not just real estate, to make sure fraud and misrepresentation do not take place as companies provide products and services.

29
Q

What is a large part of how to avoid fraud and misrepresentation?

A

The disclosures that real estate agents facilitate to let people know who they are representing and what is known about the condition of the property.

30
Q

Why was the Texas Deceptive Trade Practices act created?

A

To protect consumers and “make consumers whole” after a consumer transaction has damaged them.

31
Q

What is the purpose of the Deceptive Trade Practices Act (DTPA)?

A

To protect the public from deceptive, false, or misleading business practices, punishes those people in business who violate the Act, and protects the public from breaches of warranty.

32
Q

Under Deceptive Trade Practices Act (DTPA), how many days warning must the plaintiff give the potential defendant of the intention to file and an outline of the complaint and damages.

A

60 days

33
Q

True or False: If a defendant offers to settle and the plaintiff does not accept the offer, a judge can determine an offer is reasonable and award the settlement offer. At that time, a consumer cannot receive the attorney fees for representation in court, only the appropriate amount of what the legal fees would have been by the time the offer to settle was made.

A

True

34
Q

What is the time limit to file under the Deceptive Trade Practices Act (DTPA)?

A

2 years from the event or discovery of the event

35
Q

What can the winning consumer recover under the Deceptive Trade Practices Act (DTPA)?

A

Economic damages, attorney fees, court costs, mental anguish (if the act was performed knowingly or intentionally) up to 3 times economic damages.

Texas Law of Contracts (16 decks)

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