Texas Promulgated Forms Questions and Answers Test Bank 2023 with complete solution

Texas Promulgated Forms Questions and Answers Test Bank 2023 with complete solution Which of the following is TRUE for the statute of limitations for contracts for the sale of real estate and oral contracts for leases of less than one year? The statute of limitations is four years for the sale and two years for the lease. The voiding of a contract by a minor is an example of terminating a contract by operation of law. Which of the following would NOT be considered a competent party? A 30-year-old attorney under the influence of marijuana at the time she entered into an agreement A contract is classified as bilateral if all parties to the contract exchange binding promises. A contract to perform an unlawful act is considered which of the following? void When a contract contains all of the essential elements that make it legally sufficient or enforceable and is binding in a court of law, it is valid A person approaches an owner and says, "I'd like to buy your house." The owner says, "Sure" and they agree on a price. What type of contract is this? unenforceable The main difference between an amendment and an addendum is that an amendment is a change to the existing content in the contract. If parties to a real estate contract in Texas are held to very strict deadlines for performance, the contract likely includes the phrase "time is of the essence" "Time is of the essence" in real estate contracts means that parties are held to exact performance of their duties within the time specified in the agreement. Under the statute of frauds, all contracts for the sale of real estate must be in writing to be enforceable. Once a contract has been agreed upon and signed by all parties changes must be addressed through the use of an amendment. TREC promulgates the Loan Assumption Addendum. In a transaction where a buyer is assuming a seller's loan TREC's Loan Assumption Addendum is required. Which of these addenda includes "time is of the essence"? all of these A valid legal contract must have legally competent parties One party cancelling or terminating a contract as though it had never been made is rescission In Texas, the statute of limitations is two years for oral contracts for a lease of less than one year. Once a sales contract is completed with all parties fulfilling their promises, the ownership changing hands, and the seller receiving the sales price amount, the sales contract is a(n) executed contract A contract can be discharged or terminated by impossibility of performance According to the Texas legislature, a contract involving the sale of a residence that will take place more than 180 days after the execution of the contract is an executory contract In Texas, the statute of limitations is four years for a contract for the sale of real estate. A buyer and a seller enter into a contract using the Farm and Ranch Contract, which is one of TREC's six promulgated contracts. The effective date of the contract is June 20, and the buyer has 8 days to fulfill a duty under the contract. By when must the buyer complete the duty? June 28 at midnight A contract may be discharged under substantial performance when one party does not complete all the details exactly as the contract requires but has to a large extent performed on the contract, which may be enough to force payment. The statute of limitations is four years for which of the following? A contract for the sale of real estate An amendment is a change to the original agreement. A contract is said to be bilateral if ll parties to the contract exchange binding promises. Which of the following is TRUE regarding amendments and addenda? An amendment is completed after a contract has been executed, but addenda are completed at the same time as the sales contract. The essential elements of a valid real estate contract include all of these In Texas, the statute of limitations for an oral contract for a lease of less than one year is two years When is the effective date entered on the contract form? When the last party signs the form and the other party has been notified of the acceptance A contract with a person under duress is voidable A buyer and seller enter into a contract for the sale of a four-bedroom home. If either party defaults under the contract, the other party has how much time to file a lawsuit for damages? four years An addendum is additional information given in the offer. A seller accepted money from a buyer for his unrestricted right to cancel the purchase transaction (option to terminate) within ten days of the executed date of the sales contract. This agreement is a(n) unilateral contract A contract that exchanges a promise for a promise is said to be bilateral A legally enforceable agreement under which two parties promise to do something for each other is classified as a(n) bilateral contract Which of the following committees is responsible for drafting and revising contract forms? Broker-Lawyer Committee A buyer wanted to move in early before closing. Which TREC promulgated addendum should be used? Buyer's Temporary Residential Lease Which of the following is NOT a TREC promulgated addendum? Reverse Mortgage Financing Addendum A real estate broker modifies a 1992 TREC promulgated contract form and updates it to fit a particular transaction. Which of the following could happen? the broker could have his license suspended or revoked for practicing law. For which of the following actions may the Texas Real Estate Commission NOT suspend a licensee's licensee? The licensee explains to the principals the meaning of the factual statements or business details contained in the contracts. What type of committee is the Broker-Lawyer Committee? Advisory What does the Broker-Lawyer Committee do? draft contracts When should an offer be presented? immediately A seller wants to close using a contract for deed. Which of the following is MOST correct? The listing agent could continue helping the seller, but this type of contract must be drafted by an attorney. Which of the following forms of advice can a licensee give to an unrepresented buyer? Advice on having the abstract examined by an attorney Once the offer has been accepted, each of the parties are to receive a(n) copy of the final signed contract. Once presented an offer from a prospective buyer, the seller can do any of the following EXCEPT accept it after making a counteroffer. Which of the following is an exception to the TREC rules on contract use? When the buyer requires another form to be used A licensee who drafts a contract for the sale of her client's property is taking part in the unauthorized practice of law. A licensee is representing a buyer in a transaction and creates an addendum for a purpose for which TREC has already promulgated an addendum. Which of the following is TRUE regarding the licensee's actions? The agent could face disciplinary actions because TREC has an addendum that would work in this transaction. An offer to purchase by a potential buyer is considered accepted when the buyer is notified that the seller has accepted the offer. Which of the following is TRUE? The Broker-Lawyer Committee develops forms and recommends their adoption, but it is the TREC that promulgates the forms for mandatory use. A real estate broker, acting only as a principal to a transaction (i.e., as a buyer or seller), is exempt from mandatory use of a TREC promulgated form. Which of the following is legal for the licensee to draw up? none of these (contract, note, deed) If no standard form has been promulgated by the Texas Real Estate Commission, a real estate broker or salesperson may do any of the following EXCEPT draft an instrument that transfers an interest in real property. What is the make-up of the Broker-Lawyer Committee? Six brokers, six lawyers, and one member of the general public If a seller gave a letter to the listing agent with instructions not to deliver any offers for less than $250,000 and the listing agent receives an offer for $249,500, should he deliver it? The TREC allows the listing agent to reject this offer because the seller has given written approval Which of the following is NOT a TREC promulgated contract? contract for deed A licensee representing a seller is asked by that seller, "What does paragraph 5 of this TREC promulgated contract mean to me?" What is the best answer by that agent? "I'm not an attorney, but here is what it means..." A licensee is purchasing property for himself. A TREC promulgated contract is appropriate for this purchase, but the licensee decides to be creative and draft his own contract from what he has learned in his real estate classes. Which of the following is most likely to be TRUE? The licensee has the right to draft his own contract. How many promulgated contracts does TREC issue? six Real estate brokers who are members of the Broker-Lawyer Committee become members by being appointed by the Texas Real Estate Commission. A licensee who completes a contract for the sale of real property is not engaged in the unauthorized practice of law if the licensee uses a form that is all of these A seller wants to use her own contract. What