Your
Daily Quiz
ANSWERS TO CONTRACT QUESTIONS
1. A. A land contract is a form of seller
financing, where the seller continues to hold onto legal title until a certain
portion, or in some cases all, of the purchase price is paid. The buyer would normally take possession and
be responsible for the property. It can
also be called an installment contract, a land installment contract or a
contract for deed
2. B. A cancellation agreement is a form used to
terminate a contract. In some states it
may be referred to as a release (but not a release deed).
3. A. A counteroffer.
4. C. An Exclusive Authorization to Sell (also
called an Exclusive Right-to-Sell) is a bilateral contract because both sides
have an obligation. The agent is
obligated to market the property, and if the property sells, the seller is
obligated to pay a commission. The
other three are all unilateral contracts, where only one-side is
obligated. In an Option Contract, the
seller is obligated to sell, but the buyer is not obligated to buy. In an Open Listing, the agent is not
obligated to market the property, but if they bring an acceptable buyer, the
seller is obligated to pay a commission.
A reward does not require any one to seek the award, but does require
payment if the requested task is completed.
5. B. While an oral lease would probably be
unenforceable, the fact that the contract is for an illegal purpose would be
the overriding factor, so the contract would be void.
6. A. Delivery and acceptance is essential to a
deed. Offer and acceptance is essential
to a contract.
7. A. An assignment is a transfer of obligations
from one party to another. The original
party is referred to as the assignor and the new party is referred to as the
assignee. If the assignee defaults,
both the assignor and the assignee can be held liable by the other party in the
agreement. A novation (of the parties)
is a substitution of a new party for one of the original parties in a contract,
with the original party being free from all future liability. A novation can also be a substitution of one
contract for another contract.
8. A. We have to use a little judgment here, but I
would say if he leaves the farm to his rabbits, he was not of sound mind when
he signed the contract.
9. C. A lease is a contract, and has the same
requirements as any other contract. An
acknowledgment goes along with a deed.
A contract must have an offer and an acceptance (mutual agreement),
consideration, legally competent parties, a legal objective or legal purpose and
reality of consent (meaning that all parties have voluntarily entered into the
agreement).
10. D. “Time is of the essence” means that all
dates and times must be met exactly. If
a deadline is missed, even for a good reason, the contract would be no good. Deadlines can be extended, but only if
extended before the deadline has passed.
Back to Newsletter Back
to Your Daily Quiz Realty
Complete