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Fundamentals of Real Estate > Chapter 8 > Flashcards

Chapter 8 Flashcards

1
Q

Which of the following is considered a legal description of a property?

A

Answer: A metes and bounds description

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2
Q

What is the most common way for contracts to discharge?

A

Answer: Full performance

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3
Q

A party may be able to discharge a contract on grounds of impossibility if the object of the contract has been destroyed, and…?

A

Answer: The party had nothing to do with the destruction.

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4
Q

When is the doctrine of impossibility most often applied?

A

Answer: When the property that is the object of a contract is destroyed or rendered unusable

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5
Q

If a contract contains a force majeure provision, and an accident destroys the object of the contract, which of the following is most likely to govern the discharge of the contract?

A

Answer: The force majeure provision

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6
Q

Wilbert sells imported truffle snouts, and Floyd supplies them. Wilbert and Floyd enter into a truffle snouts supply contract, under which Floyd agrees to deliver 1,000 truffle snouts to Wilbert each week. The domestic market for truffle snouts crashes, and the availability of imported truffle snouts falls off rapidly due to truffle snout shortages abroad. Which of the following is the most likely method of discharge for this contract?

A

Answer: Agreement of the parties

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7
Q

………… is when a court orders a person to do or not do a certain action.

A

Answer: An injunction

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8
Q

………… is when the court interprets a poorly written contract to find the parties’ intentions and issues an order clarifying the parties’ respective obligations under the contract.

A

Answer: Reformation

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9
Q

………… is when the court places the parties in the same position they were prior to making the contract and discharges the contract.

A

Answer: Rescission

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10
Q

A court is most likely to award specific performance in a contract involving…?

A

Answer: real estate sales.

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11
Q

In ………… agreement, a real estate agent does not need to worry about competition from other agents.

A

Answer: An exclusive right to sell listing

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12
Q

Max is a newly licensed real estate agent. He gets a position with a brokerage firm that plans to pay him commissions, not a salary. What kind of contract might Max want to make with his new firm?

A

Answer: An independent contractor agreement

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13
Q

Which of the following is usually not mentioned in a sales contract?

A

Answer: Rent

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14
Q

If a seller would like an agent’s sales help, but wants to avoid paying a commission if the seller finds the buyer, what kind of listing agreement should the seller avoid?

A

Answer: An exclusive right to sell listing

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15
Q

Which of the following is not necessary for an agent to be considered a “statutory nonemployee” of a brokerage firm?

A

Answer: An independent contractor’s license

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16
Q

Which is NOT an essential element of a contract?

A

Answer: Time is of the essence clause

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17
Q

Tanya says to Gina, “Would you like to but my house for $300,000?” Gina says, “I can’t afford that. Would you take $260,000.” Tanya says, “OK.” This is an example of:

A

Answer: All of the answer choices provided are correct

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18
Q

The essential elements of a contract include offer and acceptance, consideration, legal capacity, and…?

A

Answer: Legal purpose

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19
Q

Tom walks up to Teresa and says, “Would you like to buy my house for $250,000, with a closing to occur on the first Friday of next month?” This is an example of…?

A

Answer: an offer.

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20
Q

The legal detriment test is a test for consideration. Under this test, consideration exists if…?

A

Answer: a party agrees to give up a legal right they have in exchange for something.

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21
Q

Willie offers to sell his house to Leopold for $100,000. Leopold says he is interested but unsure. He offers Willie $200 to hold the offer open for three weeks to let him think about it. Willie agrees and takes the $200. Which phrase best describes Willie and Leopold’s deal?

A

Answer: An options contract

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22
Q

Which contract is enforceable?

A

Answer: A contract to demolish a building belonging to one of the parties.

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23
Q

Which is required for a valid contract?

A

Answer: The free and willing acceptance of both parties

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24
Q

If a person makes an offer in jest, does an acceptance create a valid contract?

A

Answer: No. An offer must be made with an intent to create a legally binding contract.

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25
Q

Which of the following is a legal effect of a valid contract?

A

Answer: The parties acquire a duty to perform in good faith.

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26
Q

The duty to perform in good faith is…?

A

Answer: consistent with our expectations when we make a contract.

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27
Q

Which agreement is most likely to be illegal?

A

Answer: A net listing agreement

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28
Q

When a court interprets a contract, the court tries to find…?

A

Answer: the intent of the parties.

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29
Q

Brenda and Lucinda enter into a real estate sales contract for Brenda’s property, which states, “this sales contract is for Brenda’s property and all the structures on it.” A mobile home is parked on Brenda’s property. Lucinda believes their deal includes the mobile home as well as the land. Brenda says it doesn’t. Which of the following steps should Lucinda take to resolve this conflict?

A

Answer: Ask a court to interpret the contract.

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30
Q

A contract for an illegal purpose can be called…?

A

Answer: a void contract.

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31
Q

Catherine offers to sell her house to Laticia for $100,000. Laticia says she’s interested but unsure. She tells Catherine, “Look, Your house is kind of run-down. I’m not sure it’s worth $100,000. You try to find a buyer. I’ll give you $500 if you give me a chance to take you up on whatever offer you receive.” Catherine agrees and takes the $500. Which phrase best describes Catherine and Laticia’s deal?

A

Answer: A right of first refusal

32
Q

For an executed contract, all the obligations of the parties under the contract have been…?

A

Answer: performed

33
Q

When two parties close on a house, the sales contract is…?

A

Answer: Executed

34
Q

Bill is buying Sue’s house for $250,000. When they arrive at closing, Bill doesn’t have the money, and Sue doesn’t have a deed. Who breached the contract?

A

Answer: Both of them

35
Q

A ………… warns parties that failure to meet contract deadlines may cause breach.

A

Answer: time is of the essence clause

36
Q

If a contract does not contain a time is of the essence clause, when should the parties perform?

A

Answer: Within a reasonable time

37
Q

If a party thinks they might not be able to perform by an express deadline, the party should…?

A

Answer: Contact the other party before the deadline and ask for more time.

38
Q

Sasha asks a real estate agent to help her sell her house. Sasha ends up finding a buyer for the house. At the closing, no agent receives a commission. What type of listing agreement did Sasha make?

A

Answer: An exclusive agency listing

39
Q

Which of the following is NOT a major way to discharge a contract?

A

Answer: Casual disregard

40
Q

What is the most common consideration for an agreement to terminate a contract?

A

Answer: Mutual agreement of the parties

41
Q

When is the doctrine of impossibility most often applied?

A

Answer: When the property that is the object of a contract is destroyed or rendered unusable

42
Q

………… is when a court orders a person to do or not do a certain action.

A

Answer: An injunction

43
Q

………… is when the court awards a non-breaching party a money award sufficient to place the non-breaching party in the same financial position they would have been in if the breaching party had performed as required under the contract.

A

Answer: A compensatory damages award

44
Q

Which phrase is most likely to describe a real estate sales contract?

A

Answer: An express, bilateral contract

45
Q

The following are all likely resolutions in a contract suit, except for…?

A

Answer: punitive damages.

46
Q

Wilbert and Holly have a construction contract that provides, “In the event an act of god prevents Wilbert from completing construction of the planned structure, the parties agree that Wilbert shall pay Holly $10,000 dollars in damages.” Such a provision is called…?

A

Answer: a liquidated damages provision.

47
Q

A person seeking an injunction usually must show…?

A

Answer: irreparable harm.

48
Q

The worst way to discharge a contract is…?

A

Answer: Breach

49
Q

In …………, a real estate agent is certain to receive a commission if a closing occurs.

A

Answer: an exclusive right to sell listing

50
Q

In ………… agreement, a real estate agent doesnot need to worry about competition from other agents.

A

Answer: an exclusive right to sell listing

51
Q

Max is a newly licensed real estate agent. He gets a position with a brokerage firm that plans to pay him commissions, not a salary. What kind of contract might Max want to make with his new firm?

A

Answer: An independent contractor agreement

52
Q

Which contract usually does not mention a purchase price?

A

Answer: A lease

53
Q

Which is not a major kind of listing agreement?

A

Answer: A short-sale listing

54
Q

Wilifred takes his watch off of his wrist and holds it out to Tina. He says, “I’ll give you this watch next Tuesday.” He puts the watch back on his wrist and walks away. Do Wilifred and Tina have a contract?

A

Answer: No. There is no consideration.

55
Q

………….. must provide enough detail about the essential terms of a deal that the other person can accept simply by saying, “Yes.”

A

Answer: An offer

56
Q

Humboldt says, “I will sell you my dog next Friday for the sum of $50 and a bag of peanuts.” Leroy replies, “I cannot make it next Friday, and I am allergic to peanuts. However, I would gladly buy your dog next Saturday morning for $50 and a bag of potato chips.” This exchange is an example of…?

A

Answer: All of the answer choices provided are correct

57
Q

A buyer’s offer says, “This offer remains open until noon on May 21. If you wish to accept this offer, you must accept in writing delivered to our broker’s office by noon on May 21.” If the seller wishes to accept the offer, the seller should…?

A

Answer: deliver a written acceptance to the broker’s office by noon on May 21.

58
Q

Palmer is 80 years old. He gives Maxwell a contract that reads, “In consideration of the love and affection Maxwell has shown and will show me, I agree to give Maxwell $500 a year for the next 10 years.” Do they have a contract?

A

Answer: No. There is no consideration.

59
Q

Which contract is enforceable?

A

Answer: A contract to demolish a building belonging to one of the parties.

60
Q

Which is NOT an essential element of a contract?

A

Answer: a conditional clause

61
Q

Thelma asks Louise to help her sell her house. Louise asks Thelma if she had a starting price in mind. Thelma says, “You know, I just need to get $250,000 from the sale. If you find a buyer, you can keep anything over $250,000 as your commission.” Louise agrees. This example best describes which of the following…?

A

Answer: A net listing agreement

62
Q

Which of the following is necessary to create a valid contract?

A

Answer: Consideration

63
Q

Brenda and Lucinda enter into a real estate sales contract for Brenda’s property, which states, “this sales contract is for Brenda’s property and all the structures on it.” A mobile home is parked on Brenda’s property. Lucinda believes their deal includes the mobile home as well as the land. Brenda says it doesn’t. Which of the following steps should Lucinda take to resolve this conflict?

A

Answer: Ask a court to interpret the contract.

64
Q

When the parties still have obligations to perform under a contract, the contract is called…?

A

Answer: an executory contract.

65
Q

Melinda and Sasha enter into a written sales contract for Melinda’s home. Two weeks before closing, Sasha works on finalizing her loan documents and schedules a home inspection for three days before closing. Melinda works on some agreed repairs and hires a lawyer to write her deed. At this point, Melinda and Sasha’s contract is…?

A

Answer: An executory contract.

66
Q

Catherine offers to sell her house to Laticia for $100,000. Laticia says she’s interested but unsure. She tells Catherine, “Look, Your house is kind of run-down. I’m not sure it’s worth $100,000. You try to find a buyer. I’ll give you $500 if you give me a chance to take you up on whatever offer you receive.” Catherine agrees and takes the $500. Which phrase best describes Catherine and Laticia’s deal?

A

Answer: A right of first refusal

67
Q

A contract made by a minor and an intoxicated adult may be…?

A

Answer: All of the answer choices provided are correct.

68
Q

Which of the following is NOT a ground for voiding a contract?

A

Answer: Breach

69
Q

Jimmy and James offer to sell a plastic bead necklace to Mary for $100. Mary agrees, and gives Jimmy and James $100. They give Mary the necklace. When Mary gets home, she shows the necklace to her sister, Olivia. Mary suffers from schizophrenia. Who might be able to void this contract?

A

Answer: Mary

70
Q

Samantha offers to sell her house to Rebecca. Rebecca declines the offer. Samantha tells Rebecca she better buy the house, or she’ll tell Rebecca’s employer about the time Rebecca stole some equipment from the employer. Rebecca agrees to buy Samantha’s house. This contract might be voidable by Rebecca on the ground of…?

A

Answer: coercion

71
Q

Olivia asks several real estate agents to help her sell her house. A buyer is found. At the closing, no agent receives a commission. What type of listing agreement did Olivia make?

A

Answer: An open listing

72
Q

If the parties still have obligations to perform under their contract, then their contract is…?

A

Answer: executory.

73
Q

If a party thinks they might not be able to perform by an express deadline, the party should…?

A

Answer: Contact the other party before the deadline and ask for more time.

74
Q

What’s the best way to terminate a contract?

A

Answer: Full performance by both parties

75
Q

Which is an example of an assignment?

A

Answer: All the above

76
Q

Which of the following is NOT a major way to discharge a contract?

A

Answer: Casual disregard

77
Q

What is the most common consideration for an agreement to terminate a contract?

A

Answer: Mutual agreement of the parties

Fundamentals of Real Estate (12 decks)

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