TEXAS PROMULGATED CONTRACTS
Contract: – Correct Answer – A legally binding and enforceable agreement
to do or not to do a specific thing
Promulgated Contract: – Correct Answer – A contract that has been
approved and is required to be used by license holders
In Texas, what are the two entities that promulgate contracts? – Correct
Answer – TREC and TAR
In a real estate sale, the license holder must use the appropriate TRECpromulgated form UNLESS another contract form is required by the buyer’s
lender. – Correct Answer – FALSE
(Explanation: In a real estate sale, the license holder must use the
appropriate TREC-promulgated form UNLESS another contract form is
required by the property owner. The buyer’s lender has no influence over
the sales contracts used in a transaction.)
A license holder should _. – Correct Answer – disclose all
material facts to the client
Legally Competent: – Correct Answer – When an individual has reached
the age of majority (18 years of age) and has not been declared mentally
incompetent by a judge
Void Contract: – Correct Answer – A contract that has no legal effect
Voidable Contract: – Correct Answer – When one or more of the parties
has the authority to rescind the contract
Consideration: – Correct Answer – A valuable item that each party
exchanges in order to demonstrate that they agree to the contract terms
Which of the following is TRUE of mutual agreement? – Correct Answer –
There cannot be mistakes in the terms and conditions
All of the following are essential elements of a valid contract EXCEPT: –
Correct Answer – earnest money
What is NOT an element of a valid contract? – Correct Answer – earnest
money
A law that requires real estate contracts to be in writing is the __. –
Correct Answer – statute of Frauds
Valid Contract: – Correct Answer – Legal agreement meeting all the
essential, basic requirements of the law
Unenforceable Contract: – Correct Answer – A contract that cannot be
enforced by the courts
5 essential elements of a valid contract: – Correct Answer – 1.Mutual
assent (100% agreement)
2.Legally competent parties (18, sane, and sober)
3.Consideration (an exchange of something of value)
4.Lawful objective (the purpose of the contract must be legal)
5.In writing (a written and signed offer and acceptance)
If two people have a contract for one to sell illegal drugs to the other, the
contract would be: – Correct Answer – Void
A contract that cannot be enforced by the courts is . – Correct Answer – unenforceable Executory Contract: – Correct Answer – A contract that is not completely executed or performed Executed Contract: – Correct Answer – A contract in which all terms have been fulfilled by all parties A contract that is “pending” is ___________. – Correct Answer –
executory
The difference between an executory contract and an executed contract is
that the executed contract is . – Correct Answer – closed The best way for any contract to terminate is to become __________. – Correct Answer – executed
According to Texas state law, a contract for deed and a lease with an option
to buy are considered _. – Correct Answer – executory
contracts
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