In Practice Flashcards
1
Q
Real estate licensees should use ___ and ___ forms (contracts) provided by their sponsoring brokers or associations.
A
Preprinted and preapproved
2
Q
In cases where the statute of frauds applies, offer and acceptance must be…
A
in writing
3
Q
Proposing any deviation from terms of the offer constitutes a(n) ___ of the original offer.
A
rejection
4
Q
Proposing any deviation from terms of the offer constitutes a rejection of the original offer and creates a(n)…
A
new offer
5
Q
The original offer cannot be accepted after a counteroffer unless it is…
A
revived by the offeror
6
Q
Any offer or counteroffer may be withdrawn at any time before…
A
it has been accepted
7
Q
A ___ is formed after an offer has been accepted and signed.
A
contract
8
Q
An offer is not considered accepted until the person making the offer has been…
A
Notified of the other party’s acceptance
9
Q
After a buyer makes an offer, what 3 options does the seller have?
A
1) Accept
2) Reject
3) Counteroffer
10
Q
The ___ process is over if the seller accepts or rejects an offer.
A
negotiation
11
Q
If a seller makes a counteroffer, they are essentially restarting the ___ process.
A
negotiation
12
Q
When may the offeror revoke the offer?
A
Any time before receiving the acceptance
13
Q
Revocation of an offer must be communicated to the ___ by the ___.
A
Communicated to the offeree by the offeror
14
Q
Until a(n) ___ is accepted, property remain son the market, available to other buyers.
A
final offer
15
Q
A licensee must transmit all offers, acceptances, or other responses ___ to avoid charges of deliberate delay and possible communication problems
A
as soon as possible
16
Q
A licensee should keep good ___ either written or electronically throughout the negotiation process, because the final contract must reflect any changes made in the negotiation process and agreement of all parties to these changes.
A
Records
17
Q
If buyers find themselves in a dual offer situation, they will undoubtedly hear what phrase?
A
“Highest and best”
18
Q
In Illinois, what is the age of contractual capacity?
A
18
19
Q
If a mistake, fraud, misrepresentation, undue influence, or duress occurred in a contract, and the injured party were to sue for breach of contract, the injured party could argue as a defense that the agreement lacked ___.
A
Reality of consent
20
Q
A contract entered into under duress or intoxication as a result of fraud, mistake, or misrepresentation is always ___ by the compelled or defrauded party.
A
voidable
21
Q
A contract with a minor is ___ because minors are permitted to disaffirm real estate contracts at any time while underage and for a certain period of time after reaching majority age.
A
voidable
22
Q
A contract with a minor is voidable because minors are permitted to ___ real estate contracts at any time while underage and for a certain period of time after reaching majority age.
A
disaffirm
23
Q
A contract entered into by a mentally ill person is usually ___ during the mental illness and for a reasonable period after recovery.
A
Voidable
24
Q
A contract made by a person who has been found to be insane by a court is ___ at the outset based on insanity judgments being a matter of public record.
A
void
25
Most contracts entered into by a minor in Illinois are ___ until the minor reaches the age of 18 and for a reasonable time afterward.
voidable
26
In Illinois, although there is no statutory period within which a person may void a contract signed as a minor after reaching majority age (18), the courts tend to allow a maximum time period of ___.
6 months
27
In Illinois, contracts made by a minor for what the law terms necessaries are generally ___.
Enforceable
28
___ includes items such as food, clothing, shelter, and medical expenses.
Necessaries
29
In Illinois, leases or rental agreements signed by minors are generally ___ because short-term housing is usually considered a necessity.
enforceable
30
In Illinois, leases or rental agreements signed by minors are generally enforceable because short-term housing is usually considered a(n) ___.
Necessity
31
In Illinois, leases or rental agreements signed by minors are generally enforceable because short-term housing is usually considered a necessity. True or false?
True
32
A contract is ___ when the agreement is terminated.
Discharged
33
A contract is discharged when the agreement is ___.
Terminated
34
A contract ___ when it has been completely performed, with all its terms carried out.
terminates
35
A contract may be ___ for a party's breach or a default.
terminated
36
Many contracts provide that "___" meaning that the contract must be performed within the time limit specified.
Time is of the essence
37
If a contract provides that "time is of the essence," and a party fails to perform on time, they may be liable for...
Breach of contract
38
When a contract does not specify a date for performance, the act requires it should be performed...
within a reasonable time
39
Courts sometimes have declared contracts to be ___ because they did not contain a time or date for performance.
invalid
40
In Illinois, a deed or contract executed on a sunday or legal holday is ___ and ___.
Valid and enforceable
41
In Illinois, if the last day on which a deed or contract must be executed is on a holday or a sunday, when may the deed or contract be executed?
The next business day
42
Rights may be assigned to a third party (assignee) unless...
The contract forbids it
43
Obligations may be assigned (or delegated), but the ___ remains primarily liable unless specifically released.
original party
44
An assignment may be made without ___ of the other party unless the contract includes a clause that permits or forbids assignment.
consent
45
An elderly widower wants to move closer to his children. His house has been on the market for some time. The widower is in the hospital at the time a buyer makes an offer to purchase, so he assigns his contract rights to his son. This was allowed because the assignment allowed the property to be sold in a real estate closing without...
The widower being present or signing documents
46
When a real estate purchaser assumes the seller's existing mortgage loan, the lender may choose to release the seller and substitute the buyer as the party primarily liable for the mortgage debt. This is an example of what?
Novation
47
A seller who fails to deliver title to the buyer ___ a sales contract.
breaches
48
After a breach of contract, the ___ party assumes certain burdens.
Breaching (defaulting)
49
After a breach of contract, the ___ party has certain remedies.
nondefaulting
50
If either the seller or buyer breaches a real estate sales contract, the nonbreaching party may sue for ___ unless the contract specifically states otherwise.
specific performance
51
In a suit for ___, the buyer asks the court to force the seller to go through with the sale and convey the property as previously agreed.
Specific performance
52
In a suit for ___, the buyer may choose to sue for damages.
Specific Performance
53
In a suit for ___, the buyer seeks to hold the seller liable for any costs and hardships suffered by the buyer as a result of the seller's breach.
Specific performance
54
If a buyer rescinds the contract, the seller must return any ___
earnest money deposit
55
The seller can sue for damages or sue for the purchase price if the buyer ___.
Defaults
56
A suit for purchase price is essentially a suit for ___.
specific performance
57
If a seller declares that the contract forfeited, the contract usually permits the seller to retain the buyer's earnest money as ___.
Liquidated damages
58
A seller may sue for ___ if the buyer's breach resulted in further financial losses for the seller.
Compensatory damages
59
In Illinois, the statute of limitations for oral contracts is ___ years.
five years
60
In Illinois, the statute of limitations for written contracts is ___ years.
ten
61
If a newly constructed addition to a home were finished except for polishing the brass doorknobs, the contractor would be entitled to the final payment. This is an example of ___.
Substantial performance
62
To avoid charges of unauthroized practice of law, real estate licensees should avoid...
offering legal advice
63
What are licensees generally permitted to do as directed by the client on certain approved preprinted documents, such as sales contracts?
Fill in the blanks
64
Can a real estate licensee charge a separate fee for filling in the blanks on a sales contract or completing forms?
No
65
Because so many real estate transactions are similar in nature, ___ are available for most kinds of contracts.
Preprinted
66
Parties in a real estate transaction should have sales contracts and other legal documents examined by ___ before signing to ensure that agreements accurately reflect their intentions.
a lawyer
67
If preprinted forms do not sufficiently address the unique provisions of a transaction, the parties should have an attorney...
Draft an appropriate contract
68
If a change is made to a preprinted form / contract, all changes and additions are usually ___ in the margin by both parties when signing.
initialed
69
The Illinois Supreme Court decision in the case of Chicago Bar Association, et al. v. Quinlan and Tyson, Inc placed certain limitations on real estate licensees in...
Drafting a contract of sale
70
The Illinois Supreme Court decision in the case of Chicago Bar Association, et al. v. Quinlan and Tyson, Inc ruled that licensees are authorized only to....
Fill in the blanks on printed form contracts
71
Advising a buyer or seller of the legal significance of any part of a contract, or writing any change to the form language constitutes...
unauthorized practice of law
72
A licensee may not request or encourage a party to sign a contract or document containing blank spaces to be "___."
filled in later
73
A licensee cannot make changes to a signed contract without...
written consent of the parties
74
If changes are made by the agreement of all principals, buyers and sellers must ___ any changes they agree to add.
initial
75
All licensees are required to give each person signing or initialing the contract a(n) ___ within 24 hours of signing.
original true copy
76
All licensees are required to give each person signing or initialing the contract an original true copy within ___ of sigining.
24 hours
77
A licensee is permitted to prepare or complete any document subsequent to the sales contract or related to its implementation, such as a deed, bill of sale, affidavit of title, note, mortgage, or other legal instrument. True or false?
False
78
In Illinois, a licensee should not use any form titled "___" if the form is intended to become a binding real estate contract.
Offer to Purchase
79
Illinois law requires that sales contracts indicate "___" at the top in bold.
Real Estate Sales Contract
80
In Illinois, a Real Estate Sales Contract is an offer to purchase real estate as soon as it has been prepared and signed by the ___.
Purchaser
81
In Illinois, the sale of a residence often includes ___ such as drapes as well as items that are ___.
Personal property and fixtures
82
Screens and storm windows or a built-in range are included in the sale of a residence because they are ___
fixtures
83
In Illinois, any fixtures that might be questioned as fixtures are listed in the ___ to help eliminate possible arguments at the time of the final walk-through.
Sales contract
84
A seller may purchase a transferable ___ for their kitchen appliances in anticipation of selling because it makes for an attractive benefit to the buyer of the home
home warranty
85
How long do construction warranties generally last?
6 months to 2 years
86
In Illinois, many contracts provide that the earnest money deposit become the ___ property as liquidated damages if the other party defaults.
seller's
87
In Illinois, many contracts provide that the earnest money deposit become the seller's property as ___ if the buyer defaults.
liquidated damages
88
In Illinois, many contracts provide that the earnest money deposit become the seller's property as liquidated damages if...
the buyer defaults
89
What is required to release earnest money in Illinois for any reason?
Signatures of both parties
90
In Illinois, if one or more parties doesn't sign for the release of earnest monies, either party can file a civil lawsuit for...
the disbursement of earnest money
91
In Illinois, if one or more parties doesn't sign for the release of earnest monies, either party can file a civil lawsuit for the disbursement of earnest money, or the release can be negotiated by....
the parties' attorneys
92
In Illinois, if one or more parties doesn't sign for the release of earnest monies, either party can file a civil lawsuit for the disbursement of earnest money, or the release can be negotiated by the parties' attorneys. If no agreement is reached, the funds are released to...
the state treasurer
93
The escrow account is non-interest-bearing, unless...
both parties agree in writing
94
All earnest money and security deposits must be deposited into the escrow account no later than....
the end of the next business day following the acceptance of the contract
95
Escrow reconciliations must be completed within ___ after receipt of the monthly bank statement.
10 days
96
Escrow reconciliations must be kept on record for a minimum of ___ years.
5
97
Who may withdraw funds from the escrow account?
Sponsoring broker or an authorized agent
98
When does legal title transfer?
On delivery and acceptance of a deed
99
After both buyer and seller have executed a sales contract, the buyer acquires...
an interest in the land
100
Illinois' Uniform Vendor and Purchaser Risk Act states that the ___ bears any loss that occurs before the title passes.
Seller
101
In Illinois, if the entire premises or a material part is destroyed, the seller cannot enforce the contract against the buyer and all ___ must be returened.
Earnest money
102
If the parties agree to change a closing date or alter a list of personal property items included in the sale, this is an example of...
an amendment
103
Illinois requires that dual agency confirmation be included in the ___.
Sales contract
104
The Illinois Electronic Commerce Security Act allows for certain documents, such as disclosures, offers, and contracts to be...
signed electronically
105
In Illinois, certain documents, such as a will or any document that transfers title, and negotiable instruments may not be...
signed electronically
106
In Illinois, brokerages are permitted to store electronic documents in the ___ as long as they can be retrieved in a timely fashion.
Cloud
107
In the case of a letter of intent, it is best to include language stating that negotiations are ___ until a formal contract is actually executed.
Nonbinding
108
Letters of intent are ___ and intended simply for the purposes of ___.
nonbinding
negotiation
109
Contracts may be classified according to whether the parties' intentions are ___ (stated) or ___ (by actions).
express or implied
110
Contracts may be classified as ___ when both parties have obligated themselves to act.
Bilateral
111
Contracts may be classified as ___ when one party is obligated to perform only if the other party acts
unilateral
112
Contracts may be classified to their legal enforceability as ___, ___, ___, or ___.
Valid
Void
Voidable
Unenforceable
113
A(n) ___ contract is one that has been fully performed
Executed
114
A(n) ___ contract is one in which some act remains to be performed.
Executory
115
A valid ___ contract must include a description of the property.
Real estate
116
A valid ___ contract must be in writing and signed by all parties to be enforceable in court
Real Estate
117
In many types of contracts, either party may transfer his rights and obligations under the agreement by ___ or ___.
Assignment or novation
118
Contracts usually provide that the seller has the right to declare a sale canceled if the buyer ___.
Defaults
119
What type of contract binds a buyer and seller to a definite transaction as described in detail within the contract?
Real Estate Sales Contract
120
Under an option agreement, the ___ purchases or leases from the ___ for a limited time.
optionee purchases from the optioner
121
Under an option agreement, the optionee purchase from the optionor, for ___.
A limited time
122
A(n) ___ is a seller financing agreement under which a buyer purchases a seller's real estate over time.
Land contract
123
Under a(n) ___ contract, the buyer takes possession of and responsibility for the property, but does not receive the deed until all payments have been made in full.
Land contract
124
Under a land contract, the buyer receives a(n) ___ instead of the deed until all payments have been made in full.
Equitable title
125
Under a land contract, when does the buyer receive the deed?
When all payments have been made in full
126
Real estate contracts undertaken before the age of 18 are usually ___.
Voidable
127
Real estate contracts before the age of 18 are usually voidable unless they may be classified as ___.
Neccessaries
128
Brokers and managing brokers may only fill in the blanks on preprinted contract forms that are...
Customarily used in the real estate industry
129
Brokers and managing brokers may not write ___ or ___ on preprinted contract forms.
Addendums or qualifying clauses
130
___ and ___ may be used to facilitate transactions that might not otherwise occur.
Land contracts and options
131
Licensees may ___ basic terms in a land contract.
negotiate
132
___ must prepare the articles of agreement in a land contract
Attorneys
133
An escrow account may only bear interest if...
All parties agree in writing
134
It is assumed that escrow money will go to the seller as ___ in the event of a buyer default.
Liquidated damages
