law of contracts practice test 2025 COMPREHENSIVE
EXAM QUESTIONS |FREQUENTLY TESTED QUESTIONS
|RECENTLY TESTING REAL EXAM
QUESTIONS|VERIFIED SOLUTIONS (100% CORRECT)
Which of the following creates mutual consent? - (ANSWER)offer and
acceptance
A seller's homeowner's insurance policy is cancelled at the time of closing. They
will receive WHAT after closing for the part of their premium that was paid in
advance? - (ANSWER)a refund check
What are the three parties to the deed of trust?* - (ANSWER)Borrower, lender,
and trustee
Which of the following is NOT a right that comes with the power of attorney? -
(ANSWER)The right to make personal investments with the principal's funds
What is a method of withdrawing from a contract without actually canceling it?* -
(ANSWER)assignment
Jasper and Aziz are engaging a real estate transaction. They want to make sure
the interest being conveyed is officially and accurately recorded. What would they
use to do that?* - (ANSWER)one of the sales contracts promulgated by TREC
,What does the title company do with the earnest money check? - (ANSWER)They
deposit it into an escrow account.
What is a unilateral contract? - (ANSWER)a contract in which one party (the
offeror) makes a promise in exchange for a reciprocal act on the part of the
second party (the offeree)
If a homeowner sells his home, he is said to be separated from his home via: -
(ANSWER)voluntary alienation
How do lenders recover their money when borrowers do not pay their
mortgage?* - (ANSWER)The lender can foreclose, take title to the property and
sell it to recover as much money as possible.
What does RESPA stand for? - (ANSWER)Real Estate Settlement Procedures Act
Liens, easements, deed restrictions, and encroachments are all ways that WHAT
can affect the use of real property?* - (ANSWER)encumbrances
A promissory note is: - (ANSWER)the borrower's personal promise to repay the
loan to the lender
A sale contract must include the minimum requirements for a valid contract as
well as: - (ANSWER)a legal property description
,A buyer and seller are parties to a sales contract. The buyer makes several
payments before the seller rescinds the contract. The seller must: -
(ANSWER)return all payments they received from the buyer
Which of the following regarding fiduciary duties and transactions with multiple
principals is TRUE:* - (ANSWER)The agent owes fiduciary duties to only the
principal they are representing.
Land and everything growing on it or attached to it including, sheds, buildings,
trees, and crops are identified as: - (ANSWER)real estate and real property
Eduardo made several changes to his contract. WHAT are these changes called
and WHO must receive a copy of them?* - (ANSWER)These changes are
amendments and the title company must receive a copy of them.
Lynn leases an apartment. She invites her mother and her friend, Gaby, over for
dinner. Of the parties present, Lynn is responsible for: - (ANSWER)damages
caused by all parties present (Lynn, Lynn's mother, and Gaby)
Protecting consumers of real estate services, enforcing the laws the legislature
passed in the License Act, and ensuring the availability of capable and honest real
estate service providers are all responsibilities of the: - (ANSWER)Texas Real
Estate Commission
Jack and Jill own a property as tenants in common. Jack dies. What happens to
Jack's interest in the estate?* - (ANSWER)Jack's interest will go to Jack's heirs
, Which of the following statements is TRUE if a license holder is acting solely as a
principal and selling her own home? - (ANSWER)The license holder can use the
promulgated form, but it is not required.
What might express agency look like?* - (ANSWER)the principal appointing the
broker, and then the broker accepting that appointment either in writing or orally
What is an exclusive right to sell listing? - (ANSWER)a listing agreement that gives
the broker the right to the commission no matter who sells the property
Alejandra is a seller. Joe is a buyer. During their transaction, Alejandra holds the
legal title to the property until Joe pays in full. Alejandra and Joe are using a: -
(ANSWER)contract for deed
What is a lease purchase agreement? - (ANSWER)an agreement in which part of a
tenant's rent is applied to a property's purchase; used when a tenant wants to
buy a property but cannot immediately
What does it mean when a party discharges a contract? - (ANSWER)The terms
and conditions of the contract have been fulfilled or cancelled.
A buyer decides to terminate the contract during his option period. He will submit
the Termination of Contract notice to the seller and will be entitled to: -
(ANSWER)A refund of earnest money
EXAM QUESTIONS |FREQUENTLY TESTED QUESTIONS
|RECENTLY TESTING REAL EXAM
QUESTIONS|VERIFIED SOLUTIONS (100% CORRECT)
Which of the following creates mutual consent? - (ANSWER)offer and
acceptance
A seller's homeowner's insurance policy is cancelled at the time of closing. They
will receive WHAT after closing for the part of their premium that was paid in
advance? - (ANSWER)a refund check
What are the three parties to the deed of trust?* - (ANSWER)Borrower, lender,
and trustee
Which of the following is NOT a right that comes with the power of attorney? -
(ANSWER)The right to make personal investments with the principal's funds
What is a method of withdrawing from a contract without actually canceling it?* -
(ANSWER)assignment
Jasper and Aziz are engaging a real estate transaction. They want to make sure
the interest being conveyed is officially and accurately recorded. What would they
use to do that?* - (ANSWER)one of the sales contracts promulgated by TREC
,What does the title company do with the earnest money check? - (ANSWER)They
deposit it into an escrow account.
What is a unilateral contract? - (ANSWER)a contract in which one party (the
offeror) makes a promise in exchange for a reciprocal act on the part of the
second party (the offeree)
If a homeowner sells his home, he is said to be separated from his home via: -
(ANSWER)voluntary alienation
How do lenders recover their money when borrowers do not pay their
mortgage?* - (ANSWER)The lender can foreclose, take title to the property and
sell it to recover as much money as possible.
What does RESPA stand for? - (ANSWER)Real Estate Settlement Procedures Act
Liens, easements, deed restrictions, and encroachments are all ways that WHAT
can affect the use of real property?* - (ANSWER)encumbrances
A promissory note is: - (ANSWER)the borrower's personal promise to repay the
loan to the lender
A sale contract must include the minimum requirements for a valid contract as
well as: - (ANSWER)a legal property description
,A buyer and seller are parties to a sales contract. The buyer makes several
payments before the seller rescinds the contract. The seller must: -
(ANSWER)return all payments they received from the buyer
Which of the following regarding fiduciary duties and transactions with multiple
principals is TRUE:* - (ANSWER)The agent owes fiduciary duties to only the
principal they are representing.
Land and everything growing on it or attached to it including, sheds, buildings,
trees, and crops are identified as: - (ANSWER)real estate and real property
Eduardo made several changes to his contract. WHAT are these changes called
and WHO must receive a copy of them?* - (ANSWER)These changes are
amendments and the title company must receive a copy of them.
Lynn leases an apartment. She invites her mother and her friend, Gaby, over for
dinner. Of the parties present, Lynn is responsible for: - (ANSWER)damages
caused by all parties present (Lynn, Lynn's mother, and Gaby)
Protecting consumers of real estate services, enforcing the laws the legislature
passed in the License Act, and ensuring the availability of capable and honest real
estate service providers are all responsibilities of the: - (ANSWER)Texas Real
Estate Commission
Jack and Jill own a property as tenants in common. Jack dies. What happens to
Jack's interest in the estate?* - (ANSWER)Jack's interest will go to Jack's heirs
, Which of the following statements is TRUE if a license holder is acting solely as a
principal and selling her own home? - (ANSWER)The license holder can use the
promulgated form, but it is not required.
What might express agency look like?* - (ANSWER)the principal appointing the
broker, and then the broker accepting that appointment either in writing or orally
What is an exclusive right to sell listing? - (ANSWER)a listing agreement that gives
the broker the right to the commission no matter who sells the property
Alejandra is a seller. Joe is a buyer. During their transaction, Alejandra holds the
legal title to the property until Joe pays in full. Alejandra and Joe are using a: -
(ANSWER)contract for deed
What is a lease purchase agreement? - (ANSWER)an agreement in which part of a
tenant's rent is applied to a property's purchase; used when a tenant wants to
buy a property but cannot immediately
What does it mean when a party discharges a contract? - (ANSWER)The terms
and conditions of the contract have been fulfilled or cancelled.
A buyer decides to terminate the contract during his option period. He will submit
the Termination of Contract notice to the seller and will be entitled to: -
(ANSWER)A refund of earnest money
