PSI EXAM PREP QUESTIONS AND
ANSWERS 100% PASS
The transfer of rights and duties, but not liabilities, from one contract to another contract or from
one person to another person is an: ✔✔assignment
When the buyer is in default and the seller keeps the earnest money, the contract MOST likely
provided for: ✔✔liquidated damages. Earnest money is not consideration; it is the seller's
remedy in a liquidated damages contract if the buyer defaults.
A contract that has NOT yet been fully performed is ✔✔executory. The phase from offer to a
closed and executed/closed contract is called the executory period. Voidable contracts are
binding on one party and not the other. An unenforceable contract is also void due to lack of an
essential element.
A contract entered into without duress, menace, misrepresentation, or fraud means that it meets
the legal requirement of ✔✔Full consent
To create an executory contract, the offeree must accept the offer ✔✔without any changes to the
offer.
,Caveat emptor means ✔✔let the buyer beware
A real estate contract with a minor is: ✔✔voidable. Duress, fraud, misrepresentation, and minors
always make contracts voidable. A promise exchanged for performance is a unilateral contract.
When a party is in default in a contract due to missing a payment deadline, the contract is
considered ✔✔breached
A contract between two or more parties, each making a promise to perform certain acts, is called
✔✔bilateral
A contract between two parties that legally binds one party to perform but allows the other party
to disaffirm it is ✔✔voidable
An option to purchase binds which of these parties?
-Buyer
-seller
-neither
,-both ✔✔seller only
In order for contracts transferring real property to be valid, they must include all of these
EXCEPT
A)
earnest money must be given from the buyer to the seller as consideration for selling.
B)
the objective of the offer/contract must have legal purpose with the ability to transfer title.
C)
all parties must meet the legal definition of competency.
D)
the parties must come to a mutual agreement as to all terms and conditions. ✔✔A)
earnest money must be given from the buyer to the seller as consideration for selling.
A contract that has no legal force or effect is
A)
void.
B)
, unenforceable.
C)
voidable.
D)
valid. ✔✔A) void
During the period of time after a real estate sales contract is signed, but before title actually
passes, the status of the contract is
A)
unilateral.
B)
executory.
C)
voidable.
D)
executed. ✔✔B)
executory.
ANSWERS 100% PASS
The transfer of rights and duties, but not liabilities, from one contract to another contract or from
one person to another person is an: ✔✔assignment
When the buyer is in default and the seller keeps the earnest money, the contract MOST likely
provided for: ✔✔liquidated damages. Earnest money is not consideration; it is the seller's
remedy in a liquidated damages contract if the buyer defaults.
A contract that has NOT yet been fully performed is ✔✔executory. The phase from offer to a
closed and executed/closed contract is called the executory period. Voidable contracts are
binding on one party and not the other. An unenforceable contract is also void due to lack of an
essential element.
A contract entered into without duress, menace, misrepresentation, or fraud means that it meets
the legal requirement of ✔✔Full consent
To create an executory contract, the offeree must accept the offer ✔✔without any changes to the
offer.
,Caveat emptor means ✔✔let the buyer beware
A real estate contract with a minor is: ✔✔voidable. Duress, fraud, misrepresentation, and minors
always make contracts voidable. A promise exchanged for performance is a unilateral contract.
When a party is in default in a contract due to missing a payment deadline, the contract is
considered ✔✔breached
A contract between two or more parties, each making a promise to perform certain acts, is called
✔✔bilateral
A contract between two parties that legally binds one party to perform but allows the other party
to disaffirm it is ✔✔voidable
An option to purchase binds which of these parties?
-Buyer
-seller
-neither
,-both ✔✔seller only
In order for contracts transferring real property to be valid, they must include all of these
EXCEPT
A)
earnest money must be given from the buyer to the seller as consideration for selling.
B)
the objective of the offer/contract must have legal purpose with the ability to transfer title.
C)
all parties must meet the legal definition of competency.
D)
the parties must come to a mutual agreement as to all terms and conditions. ✔✔A)
earnest money must be given from the buyer to the seller as consideration for selling.
A contract that has no legal force or effect is
A)
void.
B)
, unenforceable.
C)
voidable.
D)
valid. ✔✔A) void
During the period of time after a real estate sales contract is signed, but before title actually
passes, the status of the contract is
A)
unilateral.
B)
executory.
C)
voidable.
D)
executed. ✔✔B)
executory.
