Deck 7: The Real Estate Contract

Question 1

If the seller cannot perform a real estate contract because title is not marketable, the purchaser is entitled to a return of the earnest money.

Answer 1

True

Question 2

In an option contract for the sale of real estate the purchaser is not required to purchase the property

Answer 2

True

Question 3

Certain restrictions and/or liens will cause a real estate title to become unmarketable.Which of the following, as a general rule, will make the title unmarketable?

A)Easements.
B)Zoning restrictions.
C)Mortgages.
D)None of the above.
E)Two of the above.(a and c)

Answer 3

E

Question 4

Amy negotiated the sale of her property to Carrie.After the contract was signed, Amy and Carrie also orally agree that Amy would pay to clear a large tree from the front yard.Later, Amy refuses to remove the tree and Carrie sues her.Under the parol evidence rule:

A)Amy's oral promise would not be admissible in court.
B)Amy's oral promise would be admissible in court since it was made after the contract was signed.
C)Amy's promise would be admissible in court since it caused Carrie to suffer duress after Amy refused to honor it.
D)Amy's promise would be admissible in court because the parol evidence rule does not apply to real estate transactions.

Question 5

The writing requirement of the Statute of Frauds is strictly enforced and allows
for no exceptions.

Question 6

The general rule for real estate contracts is that when the contract is silent on marketable title, the vendor does not have to convey a marketable title.

Question 7

In a mediation, the mediator typically can impose a binding agreement on the disputing parties,

Question 8

If a closing date is not specified in a real estate contract, the contract will be unenforceable.

Question 9

Cassidy sells her home to Sara "As Is." Cassidy, however, purposely fails to reveal a serious toxic mold problem that is hidden from anyone's view.Since Sara bought the home "As Is," she has no legal recourse against Cassidy.

Question 10

A "letter of intent" is an instrument that generally is meant to convey an offer.

Question 11

7.A contract required to be in writing under the Statute of Frauds must have the signatures of both parties to the contract before it can be enforceable against any one of the parties.

Question 12

The Electronic Signatures in Global and National Commerce Act (E-Sign)is a federal law that legalizes the use of electronic signatures even if they might violate a state's Statute of Frauds law.

Question 13

On June 5, Will mailed Sidney an offer to buy Sidney's lot for $35,000.On June 7, Sidney mailed a counteroffer in which he offered the lot to Will in exchange for $35,000 and Will's 1988 Sports Coupe.Later, on June 7, Will mailed Sidney a revocation of his (Will's)offer.Which of the following correctly describes the situation? (Select one, assuming that all letters arrived in the same order in which they were sent.)

A)Sidney's letter to Will terminated Will's offer.
B)Will and Sidney do not have a contract.
C)Will may now accept Sidney's counteroffer to sell his property.
D)All of the above.
E)None of the above.

Question 14

Under the "mailbox rule," the offer is accepted once the acceptance is mailed even though the offeror has no knowledge of it.

Question 15

Times should be established in the real estate contract for which of the following:

A)The seller's delivery of the evidence of title.
B)The buyer's review of the evidence of title.
C)Closing date.
D)Possession by the buyer.
E)All of the above.

Question 16

The essential terms that must be included in a real estate contract may be written on almost any type of document.

Question 17

If a vendor dies after signing a real estate contract but before the closing, the purchase price will pass to the vendor's estate as real property, while the interest of a deceased vendee would pass as personal property.

Question 18

Assume that State A's Marketable Record Title Act provides that any legal claims against property that are older than 30 years are invalid.Sam, his father and grandfather have been using a road to cross Peter's land for 50 years.Sam's claim will stand despite the Act.

Question 19

Which of the following is not one of the essential terms in a real estate contract?

A)Description of the real estate.
B)Price.
C)Name of the buyer and seller.
D)Fixtures to be retained by seller.
E)Signatures of the parties.

Question 20

The parol evidence rule provides that if the parties have put their contract in writing and intend the writing to be their final agreement, evidence of prior or future agreements may not be used in court to vary or contradict the written agreement.

Question 21

Gunter agrees to sell his home to Daniel and they sign a real estate contract on August 1.The closing is scheduled for September 1.Gunter cancels his homeowner's insurance on August 2.On August 16, the house burns down.Daniel did not buy homeowner's insurance.Under the doctrine of equitable conversion:

A)Gunter bears the risk and must pay to rebuild the house.
B)Daniel bears the risk and must pay to rebuild the house.
C)Under the Uniform Vendor and Purchaser Risk Act, a federal law which is binding in all states, the insurance company would, by operation of law, insure the house until
Closing even if the policy had been cancelled.
D)Gunter and Daniel both bear the risk equally and so would pay 50/50 to rebuild the house.

Question 22

Jimbo signs a real estate contract with Nelson in which he promises to provide evidence of a marketable title at the closing.At the closing, Jimbo fails to provide it, but Nelson, anxious to move into his new home, completes the transaction anyway.The deed did not mention any duties or covenants, including a duty to provide evidence of marketable title.Later, it is discovered that Nelson's land is subject to an unrecorded easement that seriously diminishes the property's value.In this situation:

A)Jimbo must pay Nelson damages since he did not deliver a marketable title.
B)Nelson can successfully sue for a breach of the implied warranty of habitability since the land is not as habitable as he thought it would be.
C)Under the "merger rule," Jimbo's promise merged with the deed and so now only the provisions contained in the deed are binding on the parties.
D)Jimbo's promise would be unenforceable under most states' Marketable Title Acts.

Question 23

Joseph hires a builder to build him a home according to certain specifications.Shortly after moving in, he discovers serious problems with the plumbing that cause his basement to flood.Neither the builder nor Joseph, however, was aware of the plumbing problems before he moved in.Which of the following legal actions might enable Joseph to recover damages?

A)Breach of substantial performance.
B)The implied warranty of habitability
C)Failure of specific performance.
D)Mutual mistake.
E)None of the above.

Question 24

A real estate contract can successfully be avoided when:

A)there is a mutual mistake by seller and buyer.
B)the court rules that the seller was insane when he made the sale.
C)the buyer bought the property when he was under 18, but now seeks to avoid it two months after turning 19.
D)all of the above.