Real Estate Contracts

Basic contract law; required provisions for listing agreements; earnest money agreements; options; and leases.

1. Essential elements of a contract include, among other things

I. consideration in the form of money.

II. competent parties.

III. mutual agreement.

A. I & II only B. I & III only C. II & III only D. I, II & III

2. An amount predetermined by the parties to an agreement as to the total amount of compensation a party should receive in the event that the other party breaches a specified part of the contract is known as

A. just compensation.

B. liquidated damages.

C. consideration.

D. deferred damages.

3. Taylor contracts to sell some land to Hamilton and thereafter refuses to sell. Since Hamilton wants the land he should bring suit against Taylor for

A. rescission.

B. specific performance.

C. dollar damages.

D. novation.

4. A broker in court to collect a commission on an exclusive right to sell listing must allege and prove which of the following?

I. He had an agency relationship with the seller.

II. He was licensed.

III. He introduced the buyer and the seller.

A. I only B. II only C. I & II only D. I & III only

5. An option in a contract by which the owner of property gives another person the right to purchase his property for a stated sum within a given period of time is

A. a voluntary lien.

B. an involuntary encumbrance.

C. a voluntary encumbrance.

D. none of the above.

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