Which of these statements about preparing real estate contracts in Florida is true?
Licensees are authorized to write any legal document that is required for the transactions they are participating in.
Licensees may accept direct payment for preparing contracts when they are not representing either party.
Licensees should always write their own real estate contracts.
Licensees should use the forms that their broker has approved.
What is a bilateral contract?
A contract for which one or more terms has yet to be completed
A contract in which only one of the parties offers consideration
A contract that involves an exchange of consideration between two parties
A contract that is enforceable by law
Which of the following individuals would be a competent party to a contract?
Byron, a 17-year-old MENSA member
Claudia, a 37-year-old in-patient receiving treatment for schizophrenia
Graciella, a 28-year-old unemployed parolee
Norman, a 40-year-old heroin addict
Which of the following requires that contracts transferring ownership of real property be in writing to be enforceable?
Code of ethics
Fair Housing Act
Statute of frauds
Statute of limitations
Which of these situations represents a unilateral contract?
Cain sells Trenton his bike.
Maurice promises Shelton $100 if Shelton will sell his painting. Shelton agrees, but Maurice doesn’t pay Shelton.
Nathan and Sue exchange vows at their wedding.
Sherry promises to give Brent a ride home from work, and then doesn’t show up.
What kind of contract exists after closing?
Executed
Executory
Implied
Voidable
In Florida, real estate licensees may not fill in the blanks on a lease agreement that ____________.
Has a term of longer than one year
Is a month-to-month lease
Was prepared by an attorney
Was prepared by the Florida Bar Association
The statute of frauds states that if a contract transferring ownership of real property is not in writing, it’s ______.
Enforceable
Executory
Unenforceable
Voidable
You’re talking to a co-worker at lunch, and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?
This is an express contract because you defined in words the specific terms of the agreement and consideration to be exchanged.
This is an implied contract because it is not written down and nobody signed anything.
This is an invalid contract because it is not written down and nobody signed anything.
This is a unilateral contract because only one party is providing anything of value.
Which element of a valid contract is established by getting the signatures of all parties?
Competent parties
Consideration
Lawful objective
Offer and acceptance
Which of the following is an essential element of a valid real estate contract?
Duress
Legal purpose
Misrepresentation
Mutual mistake
Which of these letter combinations can be used to recall the types of real estate contracts covered by the statute of frauds?
SOIL
SOLD
SOLID
SOLLD
Real estate sales contracts must be valid, express, bilateral, ______, and executed or executory.
Enforceable
Oral
Unenforceable
Voidable
All of the following are true regarding implied agreements EXCEPT which one?
An implied agreement is based on actions or behaviors.
An implied agreement is based on a formal agreement.
With an implied agreement, it’s possible that the other party didn’t intend to be bound.
With an implied agreement, there’s an increased chance of confusion.
Which of the following is true about the statute of frauds?
All types of written contracts, with the exception of email or other online communication, may be considered “in writing” and binding.
Any form of written contract, including email communication, may be considered “in writing” and binding.
Only contracts that are handwritten are considered to be “in writing” and binding.
Only pre-printed contracts, the blanks of which have been filled in in ink, are considered to be “in writing” and binding.
When does the listing agreement between you and a seller client need to be in writing to be enforceable?
Always
When the term of the listing agreement exceeds one year
When you are acting as a transaction broker
When you are to be paid a commission
In Florida, sales associates have legal authority to prepare ______________.
Any type of legal document related to real estate
Lease agreements
Sales contracts
Three of these statements about interpreting contracts are true, and one is not. Which statement is FALSE?
A handwritten insertion can be canceled out by typing over it.
Handwritten insertions take precedence over typed and pre-printed insertions.
If a contract shows a fee as $250 in one location and “three hundred fifty” in another, the amount of 350 will be assumed to be correct.
Louellen is about to take out a mortgage loan from her credit union. The contract includes the following information: Louellen is offering her house as consideration, and the credit union is offering $350,000; and Louellen will pay the loan back over a certain number of months at a certain rate. Both Louellen’s signature and the credit union representative signed it. What, if anything, is this contract missing in order for it to be legally binding, according to the statute of frauds?
Louellen’s credit history needs to be included.
Nothing is missing.
The condition and size of the house needs to be included.
The credit union’s physical address needs to be included.
Which type of contract is missing from this list of contracts covered by the Florida statute of frauds: sales contracts, option contracts, listing agreements for a term exceeding a year, deeds and mortgage instruments, and _____?
Broker representation agreements for a term exceeding a year
Broker representation agreements for a term that does not exceed a year
Lease agreements for a term exceeding a year
Lease agreements for a term that does not exceed a year
Which one of the following actions constitutes the unauthorized practice of law if performed by a real estate licensee who isn’t also a licensed attorney?
Drafting a legal contract using legal language
Preparing a listing agreement
Preparing a sales contract by filling in the blanks with terms specific to the contract
Preparing a sales contract using an approved form
How does the statute of frauds protect consumers?
It doesn’t allow people to own land unless they can afford it.
It provides requirements that certain contracts have to meet to be legally enforceable.
It puts a limit on how much interest financial institutions can charge.
It states that all real property sales must involve lawyers.
What does the parol evidence rule state?
All contracts, commitments, and agreements for the sale of real property must be in writing.
An Agreement of Sale must contain the essential elements of a contract for it to be enforceable.
For a real estate agreement to be enforceable, it must be in writing and signed by both parties.
In most cases, a written agreement is the final and comprehensive expression of the parties’ agreement. It generally prohibits introducing oral or written evidence that contradicts that agreement.
Which of the following describes a contract that exists based not on words, but on the parties’ actions or behaviors?
Executed
Executory
Express
Implied
Per the statute of frauds, which of the following agreements does NOT have to be written down in order to be legally binding?
Sierra sells her car to her cousin for $2,500.
Sloane agrees to pay the $400 in credit card debt that her sister owes.
The Lees rent out their basement to some college students for three months.
Tyrone and Alaya are getting married.
Which of these sentences accurately lists rules for interpreting a contract?
Pre-printed text takes precedence over typed and handwritten text.
Typed text takes precedence over handwritten text.
Typed text takes precedence over pre-printed text, and numbers (e.g. 2) take precedence over spelled-out numbers (e.g. three).
Typed text takes precedence over pre-printed text, and spelled-out numbers (e.g. four) take precedence over numerals (e.g. 5).
Why do you think that handwritten changes take priority over typed changes?
All typewriters are different.
It’s less likely to be done inadvertently.
They are made last.
Typed changes are the same as pre-printed changes.
What is the primary focus of the statute of frauds?
Anyone caught committing real estate fraud will be prosecuted.
Fraudulent behavior won’t be tolerated in the real estate profession.
Real estate purchase and sale contracts must be in writing to be enforceable.
There’s a limitation on how long someone can sue for fraud.
To meet the requirements of the statute of frauds, an agreement must clearly identify the contract’s subject matter, present the contract’s essential terms and conditions, and ______ to be enforceable.
Achieve a result that’s fair to all parties
Be agreed to verbally
Be reviewed by an attorney
Identify the contracting parties
If a minor enters into a contract with an adult, which party can hold the other party to the contract?
Either party may hold the other party to the contract
Neither party since the contract is void
The adult may legally hold the minor to the contract
The minor may legally hold the adult to the contract
Claudia and Yves enter into contract for her to buy his condo. The written contract must _____, identify the subject matter of the contract, and present the essential terms and conditions of the contract.
Achieve a result that is fair to all parties
Be handwritten
Be signed by two or more attorneys
Name the contracting parties
Drew and Hank were camping at Hank’s riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he’d buy it from Hank for $80,000, which Hank agreed was a fair price. It’s two months later, and Hank is upset that Drew now says he won’t buy it. Why isn’t this contract enforceable?
Drew didn’t have the financial resources to make the offer.
Real estate contracts must be in writing.
There was no offer and acceptance.
This wasn’t a legal purpose.
In a purchase offer, is earnest money required in order to have a binding contract?
No, because earnest money isn’t part of a sales contract.
No, because the buyer’s consideration is the promise to buy.
Yes, because it opens escrow.
Yes, because it’s the buyer’s consideration.
What is a contract that is based on an understanding or assumption, rather than on specifically defined terms?
Express contract
Implied contract
Invalid contract
Unilateral contract
What is wrong with this statement: “Handwritten information on a contract is not legally binding. All insertions must be typed.”?
Contracts are not legally binding.
Insertions are not allowed on contracts. They must be pre-printed.
Insertions do not have to be typed to be legally binding.
There is no reason to write by hand on a contract.
Rex needs to handle some money he acquired during an “unsavory” business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business deal. What kind of contract do Rex and Ben have?
Executed
Executory
Void
Voidable
What type of contract has terms that have not been completed?
Bilateral contract
Executed contract
Executory contract
Unilateral contract
What is a true statement about express agreements?
Express agreements are implied.
Express agreements are invalid.
Express agreements may be written or verbal.
Express agreements must be lengthy.
According to the statute of frauds, which of the following agreements needs to be in writing to be legally enforceable?
Condo owner Freya agreed to let her friend’s daughter stay in her spare room for four months.
Geoffrey agreed to work on his uncle’s farm for a few days to pay off the $300 he owes him.
Lara sold her book collection to her friend for $450.
Pam agreed to rent her house to Miguel for three years.
Tom and Jim are neighbors. Jim wants to buy Tom’s rental property. In the contract they sign, Jim is identified only as “the neighbor.” Which statute or contract element does this violate?
Fair housing
Legal purpose
Offer and acceptance
The statute of frauds
Florida sales associates are prohibited from preparing which of these types of real estate contracts?
Lease agreements with a term longer than one year
Listing agreements
Option contracts
Sales contracts
Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract?
The parol evidence rule
The statute of frauds
The statute of limitations
The statute of oral evidence
Your automatic check writer wrote a check for $51.50, but your printer ran out of toner, so you had to fill in the handwritten line. In a hurry, you accidentally wrote, “Fifty-one dollars and no/100 cents.” Which amount takes priority?
Neither; the check is void
The handwritten number
The numerals
The recipient must split the difference between the two amounts
What does the parol evidence rule say about contracts?
All contracts, commitments, and agreements for the sale of real property must be in writing.
A sales contract must contain the essential elements of a contract for it to be enforceable.
In order for a real estate agreement to be enforceable, it must be in writing and signed by both parties.
The terms agreed to in a written contract are the only terms relating to that contract.
Which type of contract is the opposite of an express contract?
Bilateral
Executory
Implied
Voidable
You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don’t actually exist (for now), what type of contract is this?
Enforceable
Unilateral
Void
Voidable
If a contract is signed under duress or undue influence, what essential element of a contract is missing?
Consent
Consideration
In writing
Legal Purpose
You receive an offer in the mail that says you’re eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this?
Implied contract
Invalid contract
Unenforceable contract
Unilateral contract
If two parties enter into a contractual agreement with each other to perform an illegal act, which of the following statements is true of the contract?
It is voidable, because Jesse is not mentally competent to sign a contract.
It is voidable, because Jesse probably signed it under duress.
It is voidable, because the consideration, as a percentage rather than a dollar amount, is not clearly stated.
It is void because it is not for a lawful purpose.
11sect.unit2.CeSh.PreLic.Qonly.txt
What is it called when one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms?
Assignment
Execution
Novation
Termination
When can specific performance be enforced under a sales contract?
Both parties have fully met the terms of the contract.
One or both parties have completed only a portion of the terms agreed to in the contract.
One party didn’t meet the terms of the contract in the specified timeframe, and is now being required to do exactly what was agreed to in the contract.
The parties to a contract can’t legally or practically do what they’ve agreed to do due to circumstances out of their control.
In an addendum to the purchase and sale contract, the seller agreed to perform work but was unable to finish before closing. What is this an example of?
A void contract
Contract execution
Legal purpose
Partial performance
What phrase, when used in a real estate contract, reminds the parties to avoid unnecessary delays and to adhere to all contract dates?
Haste makes waste
Patience is a virtue
Seek the advice of an attorney
Time is of the essence
Kurt promised his grandmother he’d pay her $200 a month to live in the room above her garage, and she never asked him to put that agreement in writing. He lived there a few months without paying a dime and then disappeared one night after trashing the place. How long does Grandma have to sue Kurt?
Five years
Four years
One year
Two years
Justin buys Connie’s home, and in the written sales contract, he specifies that the outdoor grill must stay with the home. Connie ends up taking the grill when she moves out. If Justin wants to sue Connie for taking the grill, he must do so within ________.
15 days
15 years
Five years
Four years
Annie and Frannie form an oral agreement for Annie to sell Frannie her property. Three years and one month later, Frannie learns that there are significant foundation problems that were hidden when she purchased the property. Is it too late for her to sue Annie?
No, because the statute of limitations on oral or written property contracts in Florida is five years.
No, because the statute of limitations on oral property contracts in Florida is four years.
Yes, because the statute of limitations on oral or written property contracts in Florida is three years.
Yes, because the statute of limitations on oral or written property contracts in Florida is two years.
A company installed faulty equipment twice, so the homeowner filed a lawsuit in an attempt to recover the money she lost. What is this an example of?
Accepting partial performance
Rescinding the contract unilaterally
Suing for damages and breach of contract
Suing for specific performance
In a contract, one of the parties only met a few of the terms. The other party accepted the work that had been done and said the contract was complete. What is this an example of?
Accepting partial performance
Mutually rescinding the contract
Rescinding the contract unilaterally
Suing for damages
Mary contracted to buy her mother’s house when her mother moves to a senior living community, but now Mary has to move because of work and no longer wants to buy the house. With their mother’s agreement, Mary’s sister, Tina, steps in, releasing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. What’s happened here?
Assignment
Breach of contract
Novation
Performance
A contract required the buyer to put down a $10,000 earnest money deposit, but the buyer put down $12,000. What is this an example of?
Buyer misrepresentation
Partial performance of the contract
Performance of the contract
Voiding of the contract
Two buyers entered into a contract to buy an income property, but prior to the sale, one of the parties was replaced by a third party. The original buyer will be held responsible if the new party fails to live up to his obligations. What is this an example of?
Assignment
Fraud
Mutual mistake
Novation
A buyer backed out of a deal, and the seller kept the earnest money deposit. What is this an example of?
Accepting liquidated damages
Accepting partial performance
Suing for damages
Suing for specific performance
A contractor built a property prior to the completion date specified in the contract. What is this an example of?
Non-performance
Partial performance
Performance
Voiding
What process involves substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights?
Assignment
Execution
Novation
Re-contracting
After entering into a contract, an inspection revealed that the property has extensive roof damage. The seller declined to fix it, so the parties agreed to cancel the deal. What is this an example of?
Accepting liquidated damages
Accepting partial performance
Mutually rescinding the contract
Unilaterally rescinding the contract
A subcontractor missed several key deadlines, and the homeowner lost money waiting for the work to be completed. The homeowner consulted an attorney and terminated the contract. What is this an example of?
Accepting partial performance
Mutually rescinding the contract
Rescinding the contract unilaterally
Suing for damages
Which of these sentences accurately describes the phrase “statute of limitations”?
There are deadlines for certain types of legal action.
There are limits to how many times someone may sue another person.
There are limits to the monetary damages that may be awarded in a civil suit.
There’s a limit to the number of statutes that may be enacted each year.
A buyer made a partial earnest money deposit. The seller accepted the lesser deposit, and the sale was ultimately finalized. What is this an example of?
Accepting partial performance
Rescinding the contract unilaterally
Suing for damages
Suing for specific performance
When does substantial performance of a contract occur?
Both parties fully meet the contract’s terms.
One or both parties have completed only a portion of the terms agreed to in the contract.
One party did not meet the terms of the contract in the specified timeframe and is being required to do exactly what was agreed to in the contract.
One party has met most but not all of the terms specified in the contract, and may be required to pay damages for the terms not met.
A contract specified that the refrigerator and stove would be included in the sale, but the seller took the refrigerator. The buyer went through with the sale anyway. This is an example of ______ of the contract.
Partial performance
Performance
Reinforcement
Voiding
In contract law, when does partial performance occur?
When a party acknowledges receipt of the contract
When a party does some, but not all, of what the party has agreed to do
When a party meets all terms of the contract
When a party rejects all terms of the contract
Which one of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements?
The contract can’t close.
The contract is unenforceable in court.
The contract is void.
The contract is voidable.
Mary agreed to buy her mother’s house when her mother planned to move to a senior living community. Mary had a lease, but when she had to move because of work, she signed her rights in the contract over to her sister, Tina. What’s happening in this scenario?
Assignment
Breach
Novation
Performance
What’s the key difference between assignment and novation of a contract?
Assignment releases the original party from all obligations, while novation does not.
Individual contracts must specifically allow novation, but not assignment.
Novation is disallowed in many states, while assignment is not.
Novation releases the original party from all obligations, while assignment does not.
What language may be included in a contract after the assignor’s name to make it clear that the contract is assignable?
“And/or assigns”
“Buyer beware”
“Spouse or partner”
“Time is of the essence”
A buyer had a contract to buy a property. The buyer paid the agreed-upon amount, and the seller transferred the deed. What happened in this scenario?
Assignment
Breach
Novation
Performance
A buyer and seller entered into a contract, but prior to closing, the buyer changed his mind. With the seller’s approval, a third party took the buyer’s place as the buyer in the purchase contract. What is this an example of?
Assignment
Fraud
Misrepresentation
Novation
Two buyers entered into a contract to purchase a home. One of the buyers pulled out of the deal, and all of the parties agreed to allow a substitute buyer to take the original buyer’s place in the contract. What is this an example of?
Assignment
Fraud
Mutual mistake
Novation
When does partial performance of a contract occur?
Both parties fully meet the terms of the contract.
Due to circumstances out of their control, the parties cannot legally or practically do what they’ve agreed to do.
One or both parties have completed only a portion of the terms agreed to in the contract.
One party did not meet the terms of the contract in the specified timeframe and is being required to do exactly what was agreed to in the contract.
When a contract has been breached, the wronged party may attempt to sue for punitive damages, which are ______.
An agreed-upon amount that the buyer will pay the seller if the buyer breaches the contract
Compensation for actual loss based on the contract’s value
Non-monetary damages
Payments in excess of any compensatory damages
When a buyer breaches the real estate sale contract, the seller may file a lawsuit for compensatory damages. Which of the following best describes compensatory damages?
A specified monetary amount agreed upon by the buyer to pay the seller, if the buyer breaches the contract.
A specified monetary amount the seller agrees to pay the buyer, if the seller breaches the contract.
Compensation for actual loss based on the contract’s value.
Payment in excess of the contract’s value.
Which of the following scenarios is an example of novation?
Cynthia has a contract with Jack to buy his house. She terminates the contract after the inspection and writes a similar contract on a new property with Jeff.
Doug is buying Norm’s farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract.
Marcie contracts to buy Suzanna’s beauty salon. Marcie gets cold feet, though, and terminates the contract.
Using a clause in the original purchase contract, Roxanne assigns her contractual right to purchase a property to her friend, Caroline.
In which of the following scenarios is impossibility of contract performance occurring?
Both parties fully meet the terms of the contract.
Due to circumstances beyond their control, the parties can’t legally or practically do what they’ve agreed to do.
One or both parties have completed only a portion of the terms agreed to in the contract.
One party didn’t meet the terms of the contract in the specified timeframe and is being required to do exactly what was agreed to in the contract.
After closing, the seller refused to deliver the title. The buyer met all of the obligations outlined in the written contract, so the buyer took the seller to court. What is this an example of?
Accepting partial performance
Rescinding the contract unilaterally
Suing for damages
Suing for specific performance