Module 1

Question 1

What is an agreement that meets the requirements of the law

Answer 1

Valid Contract

Question 2

What is an agreement that is invalid from the beginning and does not affect the parties

Answer 2

Void contract

Question 3

What is a contract where one party has the right to withdraw from the contract

Answer 3

Voidable Contract

Question 4

What is a contract that violates the Statute of Frauds and will not be enforced by the courts

Answer 4

Unenforceable contract

Question 5

What is one of the elements of a valid contract. Sane, sober, consenting adults who are recognized by law as being able to contract with others

Answer 5

Competent parties

Question 6

What is one of the elements of a valid contract, meeting of the minds

Answer 6

Mutual consent

Question 7

What is one of the elements of a valid contract. If the purpose of the contract is to do an illegal act, the contract is void

Answer 7

Legal purpose

Question 8

What creates enforceability of a contract according to the statute of frauds

Answer 8

In writing

Question 9

What is one of the elements of a valid contract. Something of value given by the party to a contract. The buyer’s promise to pay in exchange for the seller’s promise to deliver a deed

Answer 9

Consideration

Question 10

What is a contract that has been signed by the parties, but not yet carried out – sales contract before closing or contract for deed

Answer 10

Executory contract

Question 11

What is an exchange of promises binding both parties

Answer 11

Bilateral contract

Question 12

What is a unilateral contract where one party has the option to buy property at a preset price within a negotiated time period

Answer 12

Option

Question 13

What is a contract where only one party made a promise, only one party can be sued

Answer 13

Unilateral contract

Question 14

What is a modification to an existing agreement is made and signed

Answer 14

Amendment

Question 15

What is additional material or supplemental information added to an agreement

Answer 15

Addendum

Question 16

What is a substitution of a new party into an existing agreement – can be used to shield the identity of a buyer who wishes to be anonymous

Answer 16

Assignment

Question 17

What is the substitution of a new contract for an existing one – the original agreement is terminated

Answer 17

Novation

Question 18

What is it called when bringing an offer or contract to an end before it has been fulfilled

Answer 18

Termination

Question 19

What is the difference between a void and a voidable contract?

Answer 19

A void contract is invalid from the beginning and does not affect the parties. A voidable contract is one that cannot be enforced against one or more of the parties.

Question 20

Is Earnest money an element of a valid contract?

Answer 20

No

Question 21

Five essential elements must exist for a contract to be considered valid and enforceable. They are:

Answer 21

C.O.L.I.C.

Competent Parties
Offer and Acceptance (Mutual Consent)
Legal Purpose
In Writing
Consideration

Question 22

What is the duration of the executory contract?

Answer 22

Executory contract is from the effective date through closing. Typically, 45-60 days.

Question 23

Common amendments include:

Answer 23

changes to the closing date, changes to the sales price, down payment, and/or financed amount, repairs, removal of contingencies.

Question 24

When a provision in an addendum contradicts a provision in the main body of the contract, which one takes precedence over?

Answer 24

the provision in the addendum prevails

Question 25

Can you assign contracts for personal services, like a listing or buyer representation agreement?

Answer 25

No