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Unit 11
Test Questions
| Question | Answer |
|---|---|
| A person approaches an owner and says, "I'd like to buy your house." The owner says, "Sure," and they agree to a price. What kind of contract is this? | Unenforceable |
| What is the outcome in Pennsylvania when a real estate licensee provides legal advice to the sellers or the buyers? | Criminal offense |
| In Pennsylvania, an electronic signature is | valid. |
| A buyer and a seller sign a contract to purchase. The seller backs out, and the buyer sues for specific performance. What is the buyer seeking in this lawsuit? | Transfer of the property |
| If a real estate sales contract states that time is of the essence and the stipulated date of transfer comes and goes without a closing, the contract is | breached. |
| In filling out a sales contract, someone crossed out several words and inserted others. To eliminate future controversy about whether the changes were made before or after the contract was signed, the usual procedure is to | have both parties initial or sign and date the margin near each change. |
| Under the statute of frauds, contracts for the sale of real estate must be | in writing to be enforceable. |
| A man has an executory contract to buy property but would rather let his friend buy it instead. If the contract allows, the friend can take over the man's obligation by the process known as | assignment. |
| A son forged his mother's signature on the listing agreement because he didn't want to bother her with details. What is the status of the listing agreement? | Void |
| Which of the following is NOT one of the essentials of a valid contract? | Earnest money |
| While suffering from a mental illness that caused delusions, hallucinations, and loss of memory, a person signed a contract to purchase real estate. Under these conditions, what is the status of the contract? | Voidable |
| The buyer asked the real estate licensee to prepare an agreement to purchase because the buyer wanted to make an offer. With these instructions, the licensee | If the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date. |
| Pennsylvania's Plain Language Act requires that many consumer contracts | use short words and be written in the active voice. |
| Which of the following are legal in Pennsylvania? | Electronic signatures, records, and writing |
| A void contract is | not legally enforceable. |
| The legal proceeding or legal action brought by either the buyer or the seller under a purchase contract to enforce the terms of the contract is known as | specific performance. |
| What is the statute of limitations in Pennsylvania to file for breach of contract? | Four years |
| Every real estate contract must have | an offer and acceptance. |
| At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil was firm enough to support the construction of a building when, in fact, the seller knew it was not. This contract is | voidable by the buyer because of fraud. |
| The statute of frauds, which requires that a contract be in writing to be enforceable, applies to | all real estate sales agreements. |
| A buyer and a seller agree to the purchase of a house for $200,000. The contract contains a clause stating that time is of the essence. Which statement is TRUE? | If the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date. |
| A written real estate contract is assumed to be the complete agreement of the parties because of the | parol evidence rule. |
| A bilateral contract is one in which | the promise of one party is given in exchange for the promise of the other party. |
| A contract for the sale of real estate that does not state the consideration to be paid for the property and is not signed by the parties is considered | void. |
| A contractor has finished a home except for a few small details. The homebuyer and the contractor agree that the work is complete enough to consider the contract discharged. In this situation, the contractor is entitled to final payment based on | partial performance. |
| A contract agreed to under duress is | voidable. |
| Which of the following keeps an offer open? | An offer from a third party |
| A broker took a listing and later discovered that the client had previously been declared legally incompetent. The listing is now | of no value to the broker because it is now void. |
| A lender agrees to release the first borrower from all financial obligations and let the second buyer be responsible for the repayment of the debt. This is an example of | a novation. |
| The Plain Language Consumer Contract Act in Pennsylvania applies to | agreements of sale and leases. |
| In Pennsylvania, under what conditions may real estate licensees fill in the blanks on certain preprinted documents, such as agreements of sale? | As long as they do not charge a fee for this service |
| A contract for an illegal purpose, such as setting up a business in a residential neighborhood, is considered | void. |
| All of the following terminates an offer EXCEPT | a signature with no changes. |
| The contract may include a clause that limits the amount of money to which the seller is entitled in case the buyer breaches the contract. What is this clause? | Liquidated damages |
| The Plain Language Consumer Contract Act in Pennsylvania requires simple and easy-to-understand language in all of the following contracts EXCEPT | deeds and mortgages. |
Created by:
adalieburgard26