SECTION ELEVEN: REAL ESTATE CONTRACTS

1. An important legal feature of a contract is

2. According to contract law, every valid contract is also

3. The guardian for a mentally incompetent party enters into an oral contract with another party to buy a trade fixture. This contract

4. A prospective homebuyer submits a signed offer to buy a house with the condition that the seller pays financing points at closing. The seller disagrees, crosses out the points clause, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, the status of the offer is

5. As part of a construction contract between a contractor and a buyer, the contractor promises to complete construction by November 20. This promise can be construed as

6. An unscrupulous investor completes a contract with a buyer to sell a property the investor does not own. The sale contract for this transaction

7. A homeowner encourages an agent to aggressively persuade a buyer to purchase his house by overinflating historical appreciation rates. The agent and the seller agree that 25% annual appreciation would work, even though this figure is four times actual rates. The pitch succeeds, and the seller accepts the buyer’s resulting offer. This contract is

8. The statute of limitations requires that parties to a contract who have been damaged or who question the contract’s provisions

9. The purpose of the Statute of Frauds is to

10. A seller immediately accepts a buyer’s offer but waits eight days before returning the accepted document to the buyer. Meanwhile, the offer has expired. Which of the following is true?

11. A buyer agrees to all terms of a seller’s offer except price. The buyer lowers the price by $1,000, signs the form, and mails it back to the seller. At this point, the seller’s offer

12. A buyer submits an offer to a seller. Two hours later, the buyer finds a better house, calls the first seller, and withdraws the offer. Which of the following is true?

13. Real estate contracts that are not personal service contracts

14. Which of the following contracts must be in writing to be enforceable?

15. A good example of a unilateral contract is

16. A contract is discharged whenever

17. A contract may be defensibly terminated without damages if

18. A landlord suddenly terminates a tenant’s lease in violation of the lease terms. The tenant takes action to compel the landlord to comply with the violated terms. This is an example of a suit for

19. The type of listing that assures a broker of compensation for procuring a customer, regardless of the procuring party, is a(n)

20. An owner agrees to pay a broker for procuring a tenant unless it is the owner who finds the tenant. This is an example of a(n)

21. A landlord promises to compensate a broker for procuring a tenant, provided the broker is the procuring cause. This is an example of a(n)

22. A property owner agrees to pay a broker a commission, provided the owner receives a minimum amount of proceeds from the sale at closing. This is an example of a(n)

23. The most significant difference between an owner representation agreement and a buyer representation agreement is

24. A multiple listing authorization gives a broker what authority?

25. A “protection period” clause in an exclusive listing provides that

26. Several buyers are competing for the last available home in a desirable new subdivision. One buyer calls the owner-developer directly on the phone and offers $10,000 over and above the listed price. The developer accepts the offer. At this point,

27. An owner completes a contract to sell her property. Before closing, the seller runs into financial trouble and assigns the contract to her principal creditor. The buyer cries foul, fearing the property will be lost. Which of the following is true?

28. During the executory period of a sale contract, the buyer acquires an equitable title interest in the property. This means that

29. The purpose of an escrow account is to

30. A sale contract contains an open-ended financing contingency: if the buyer cannot obtain financing, the deal is off. Six months later, the buyer still cannot secure financing. Which of the following is true?

31. In the event of a buyer’s default, a provision for liquidated damages in a sale contract enables a seller to

32. A due-on-sale clause in a sale contract puts parties on notice that

33. A sale contract may specifically deal with tax withholding responsibility if the seller is a foreigner. What is this responsibility?

34. An important legal characteristic of an option-to-buy agreement is that

35. A tenant has an option-to-purchase agreement with the landlord that expires on June 30. On July 1, the tenant frantically calls the landlord to exercise the option, offering the apology that she was busy with a death in the family. Which of the following is true?

36. A tenant exercises an option to buy a condominium. The landlord agrees, but raises the agreed price by $3,000, claiming financial distress. The landlord does, however, offer the tenant two months of free rent before closing as an offset. Which of the following is true?

37. Which of the following is true regarding the legal nature of option contracts?

38. A landlord promises to compensate a broker for procuring a tenant, provided the broker is the procuring cause. This is an example of a(n)

39. Which of the following is NOT a required disclosure when selling a property in Florida?

40. What property sales practice changed as a result of Johnson v. Davis?