chapter 8 quiz Flashcards

1
Q

Smith enters into a contract with jones. unknown to Smith, jones has previously been judicially determined of unsound mind. under these conditions, the contract is:

A

void

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2
Q

a broker holding an earnest money deposit:

A

is a trustee for the principal.

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3
Q

acceptance of an offer will not create a binding contract if the acceptance is:

A

qualified–>it’s only an offer

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4
Q

Mr. and Mrs. Brown want to have the house Mrs. Richardson is selling, but the Browns might have trouble getting mortgage loan because they recently started a business. the parties agree to enter into a 5 year land contract (installment sale). which is true.

A

the land contract allows the Browns occupancy and also equitable title.

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5
Q

contract law requires that parties to a contract be “competent” to enter into the agreement. which of the following would probably be qualified to sign?

A

a laborer who is illiterate but wants to sign with an X.

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6
Q

Smith is trying to sell a property to Jones for $50,000. Jones is anxious to buy but unsure about whether he can raise the money. Therefore, he pays Smith $500 for a 30-day option. Under such circumstances, which is true?

A

If jones does raise the money he needs, Smith must sell and the price is not negotiable.

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7
Q

Johnson made an offer to Quick to purchase Quick’s land. Quick accepted the offer but, before notifying Johnson, Quick died. Under these circumstances Johnson:

A

will have to renegotiate the contract with Quick’s heirs.

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8
Q

after the signing of a valid sales contract, purchaser Bob Clark discovered the land he was buying had no oil underneath it as he had thought. he may:

A

have to complete the transaction

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9
Q

in the event of a default, the predetermined amount, which represents the total compensation the injured party will receive, is known as:

A

liquidated damages

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10
Q

Ben and Will are both mistaken as to the parcel of land that Ben is buying from Will. under these circumstances:

A

there is no contract.

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11
Q

the Lawsons are being transferred to another city. they have reached a binding agreement for the sale of their condominium to Jennifer. Three weeks before the closing they learn that the job transfer has been cancelled and asked their agent to let Jennifer know they no longer intend to sell. Which of the following is true?

A

the Lawsons might be forced to sell if Jennifer sues for specific performance.

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12
Q

which of the following would NOT be legally sufficient to support the consideration in a sales contract?

A

Love and Affection

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13
Q

Oral contracts for the sale of real property may be valid, but they are unenforceable because of:

A

the statute of frauds.

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14
Q

which of the following actions is most likely to result in constructive fraud:

*negligent misrepresentation

A

Broker Jones thinks property values in the neighborhood have gone up 20% in the last year and informs buyer Smith when careful examination of records would have shown a 5% increase.

**misleading the other party with/out intent

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15
Q

Smith enters into a contract with Jones to buy Jones’ land. Before closing, Smith changes her mind. Brown, an acquaintance of Smith, says he would like to buy the land, so Smith transfers her rights and obligations under the contract to Brown. Smith’s actions are:

A

legal if not restricted by the contract

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16
Q

a bilateral contract is one:

A

in which a promise by one party is given in exchange for a promise by another party.

17
Q

Undue influence or duress applied to one party to a contract makes the contract:

A

voidable

18
Q

in order for a real estate Purchase and Sale Agreement to be a valid contract, it must include:

A

a complete legal property description

19
Q

Robert made an offer to Dan who immediately made a counter-offer. which of the following statements is false?

A

if Robert refuses Dan’s counter-offer, then Dan may accept the original offer and bind Robert to the contract?

20
Q

Jane, who is seventeen years old, enters into a contract to buy George’s home. the contract is:

A

voidable

21
Q

between the signing of a contract and the closing, the contract is:

A

executory.

22
Q

when a corporation contracts to buy property, the contract is signed by:

A

the designated officers.

23
Q

all the following will discharge the contractual obligation EXCEPT:

A

Statute of limitations

24
Q

the phrase “time is of the essence” in the contract means:

A

time limits must be strictly observed.

25
Q

if a person who is a minor or mentally incompetent has property to be sold or leased, the contract is signed by:

A

a guardian