HUMBER REAL ESTATE - COURSE 1,
MODULE 6 EXAM
What is a contract? - Correct Answers -A legally binding agreement between two or
more persons, competent at law to enter into such agreement, for consideration or
value, to do or refrain from doing something lawful.
True or false? An oral contract for the acquisition or disposition of any interest in the
land is enforceable. - Correct Answers -False. Any contract in real estate is required to
be in writing.
When drafting a contract, what does The Statute of Frauds require? - Correct Answers
-- Must be in writing to be enforceable by law (the only exception is when a contract is
verbal but parties begin to complete the contract, then it could be enforceable)
What are the contract requirements of The Vendors and Purchasers Act? - Correct
Answers -- The seller is not bound to produce any abstract of title, deed, copy of a deed
or other evidence of title except as are in the seller's possession or control
- The buyer shall search the title at the buyer's own expense and shall make any
objections in writing within 30 days from making of the contract
- The seller has 30 days in which to remove any objection made to the title. If the seller
is unable or unwilling and the buyer doesn't waive the request, the seller may cancel the
contract and return any deposit made, but is not otherwise liable to the buyer
- Taxes, local improvements, insurance premiums, rent and interest shall be adjusted as
at the date of closing
- The conveyance (legal process of transferring of ownership from one party to another)
shall be prepared by the seller and the mortgage, if any, by the buyer; the buyer pays
for the registration of the transfer/deed and the seller pays for the discharge of the
mortgage
- The buyer is entitled to possession or the receipt of rent and profits upon the date of
closing the transaction
What are the contract requirements of The Real Estate and Business Brokers Act? -
Correct Answers -- All agreements are reduced to writing at the earliest opportunity,
signed by the brokerage and submitted to the seller or buyer for signature
- That registrants use their best efforts to ensure that all parties to an agreement receive
a copy as soon as possible and ensure that deposits and other related documents (i.e.
, notice removing conditions) be delivered in accordance with the agreement of purchase
and sale
What is 'Evidence of a Contract'? - Correct Answers -Since a contract is the legal
relationship created between the parties, the contract document is the written record
and therefore a reflection of the mutual commitment agreed to by the contracting
parties. A document, such as an Agreement of Purchase and Sale, is evidence of a
contract.
Define the 'Parol Evidence Rule' - Correct Answers -In the determination of contractual
disputes, this rule provides that oral evidence is inadmissible in court to vary or
contradict the terms of a written contract, except in a case of fraud or mistake.
What is 'Privity of Contract'? - Correct Answers -The general rule that only parties to a
contract can enforce it or be bound by it.
(i.e. A salesperson signs an agreement as a witness, but because the contract is
between the buyer and seller, only they are privy to the contract.)
What are the essential elements of a contract? - Correct Answers -- Genuine intention
(Both parties must consent to the terms of the contract)
- Lawful object (The contractual arrangement must be lawful)
- Definite & clear (The subject and terms of the agreement must be stated clearly)
- Consideration (Each party must receive something of value)
- Capacity of the parties (The parties entering into a contract must be legally competent
& of sound mind and legal after of majority to make the contract)
- Offer and acceptance (There must be mutual agreement between the parties)
What type of persons may be deemed incapable of contracting? - Correct Answers --
Mentally incompetent
- Intoxicated
- Non est factum (did they know what they were signing?)
- Minor under 18 (can decide to go forward with the contract or choose to end it)
In a partnership, can one partner sign a contact on behalf of the other person? - Correct
Answers -Yes. Any partner may bind the other partners in a transaction during the
ordinary course of business.
A binding contract requires an ___________ of something between the parties. -
Correct Answers -Exchange
What does "Signing under seal" mean? - Correct Answers -You cannot change your
mind.
What are the types of mistakes when considering law? - Correct Answers -- Common
mistake
- Mutual mistake
MODULE 6 EXAM
What is a contract? - Correct Answers -A legally binding agreement between two or
more persons, competent at law to enter into such agreement, for consideration or
value, to do or refrain from doing something lawful.
True or false? An oral contract for the acquisition or disposition of any interest in the
land is enforceable. - Correct Answers -False. Any contract in real estate is required to
be in writing.
When drafting a contract, what does The Statute of Frauds require? - Correct Answers
-- Must be in writing to be enforceable by law (the only exception is when a contract is
verbal but parties begin to complete the contract, then it could be enforceable)
What are the contract requirements of The Vendors and Purchasers Act? - Correct
Answers -- The seller is not bound to produce any abstract of title, deed, copy of a deed
or other evidence of title except as are in the seller's possession or control
- The buyer shall search the title at the buyer's own expense and shall make any
objections in writing within 30 days from making of the contract
- The seller has 30 days in which to remove any objection made to the title. If the seller
is unable or unwilling and the buyer doesn't waive the request, the seller may cancel the
contract and return any deposit made, but is not otherwise liable to the buyer
- Taxes, local improvements, insurance premiums, rent and interest shall be adjusted as
at the date of closing
- The conveyance (legal process of transferring of ownership from one party to another)
shall be prepared by the seller and the mortgage, if any, by the buyer; the buyer pays
for the registration of the transfer/deed and the seller pays for the discharge of the
mortgage
- The buyer is entitled to possession or the receipt of rent and profits upon the date of
closing the transaction
What are the contract requirements of The Real Estate and Business Brokers Act? -
Correct Answers -- All agreements are reduced to writing at the earliest opportunity,
signed by the brokerage and submitted to the seller or buyer for signature
- That registrants use their best efforts to ensure that all parties to an agreement receive
a copy as soon as possible and ensure that deposits and other related documents (i.e.
, notice removing conditions) be delivered in accordance with the agreement of purchase
and sale
What is 'Evidence of a Contract'? - Correct Answers -Since a contract is the legal
relationship created between the parties, the contract document is the written record
and therefore a reflection of the mutual commitment agreed to by the contracting
parties. A document, such as an Agreement of Purchase and Sale, is evidence of a
contract.
Define the 'Parol Evidence Rule' - Correct Answers -In the determination of contractual
disputes, this rule provides that oral evidence is inadmissible in court to vary or
contradict the terms of a written contract, except in a case of fraud or mistake.
What is 'Privity of Contract'? - Correct Answers -The general rule that only parties to a
contract can enforce it or be bound by it.
(i.e. A salesperson signs an agreement as a witness, but because the contract is
between the buyer and seller, only they are privy to the contract.)
What are the essential elements of a contract? - Correct Answers -- Genuine intention
(Both parties must consent to the terms of the contract)
- Lawful object (The contractual arrangement must be lawful)
- Definite & clear (The subject and terms of the agreement must be stated clearly)
- Consideration (Each party must receive something of value)
- Capacity of the parties (The parties entering into a contract must be legally competent
& of sound mind and legal after of majority to make the contract)
- Offer and acceptance (There must be mutual agreement between the parties)
What type of persons may be deemed incapable of contracting? - Correct Answers --
Mentally incompetent
- Intoxicated
- Non est factum (did they know what they were signing?)
- Minor under 18 (can decide to go forward with the contract or choose to end it)
In a partnership, can one partner sign a contact on behalf of the other person? - Correct
Answers -Yes. Any partner may bind the other partners in a transaction during the
ordinary course of business.
A binding contract requires an ___________ of something between the parties. -
Correct Answers -Exchange
What does "Signing under seal" mean? - Correct Answers -You cannot change your
mind.
What are the types of mistakes when considering law? - Correct Answers -- Common
mistake
- Mutual mistake
