2. Offer and Acceptance is also known as the of the, or.

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Clarissa Lloyd
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1 CHAPTER 1 - EXERCISES Note: Before completing the short-answer questions in this and all chapters, please carefully review the Instructions Page for more information about the function and purpose of these sections. To summarize: a) The Short-Answer sections and the Quizzes for each chapter are not intended solely as tests of either your knowledge of the subject or your ability to look up or memorize facts. (After all, we re giving you the answers.) Instead, Short-Answer Sections and Quizzes for each Chapter are intended as exercises and additional learning resources to help understand and recall the large amount of information unfamiliar to most students but which will nevertheless be tested on the state license exam. As such, these questions are not simply a mirror-image of the text - with a few words missing. You will find that these exercises present some information in a new and different way than the wording in the text. So don t worry that your quiz results indicate you don t already know it all from a reading of the Chapters. These are exercises; the real test will come later, when you take the final exam. (And remember, the final exams are also open-book!) b) If you need further explanation or perspective, remember the valuable online Q&A resource for each course. For the Uniform course, please click this link or type: in your browser, or you can access it by entering your Student Number and Password into the Student Login Page and clicking the link provided. c) You are not to submit these worksheets or your answers to the School. These are Chapter exercises to reinforce the important information to learn for the course final exam and state license exam. You will be provided with the answers for each Chapter Short-Answer section and Quiz by clicking the Answers link at the login page. d) Note that just like the text for Chapter 1 you will see a Q&A button next to some of the Answers to the questions in each Short-Answer section and Quiz. Clicking the Q&A button on the downloadable pdf while connected to the internet will open the Q&A page, directly to a discussion about that topic or question. If you have a question about a question, or would simply like additional information or perspective about the topic, be sure to click these links. SHORT-ANSWER QUESTIONS 1. The three requirements for a valid contract are: a) and ; b) ; c) Absence of. 2. Offer and Acceptance is also known as the of the, or. Copyright All Rights Reserved 1 Real Estate Law & Practice (48 credit hrs)

2 3. An Offer is made by the. The is the person to whom the offer is made. When the offer is, a contract is formed. An offer is considered to be held open for a time, unless it specifies a particular time. 4. An offer is automatically if it states "time is of the " and the period specified expires. 5. An offer may be in any reasonable manner if it fails to specify the form. Acceptance does not take place until the offeror is. 6. If the offeror did not receive any to keep the offer open, the offeror may withdraw, or the offer any time prior to acceptance. 7. The act of placing an acceptance in the is effective acceptance, even if the offeror tries to revoke after the acceptance is, but before it is received. 8. The death of the offeror prior to acceptance the offer. However, after acceptance, the agreement is still binding on the of the deceased party. This may not be true if the contract was for the services of one of the parties. The death of a corporate does not terminate the offer. 9. An acceptance of the offer which changes one or more terms of the original offer is called a. Since this now becomes a new offer, the parties switch positions and the original offeror becomes the new. Once any offer is, it is considered dead and cannot be accepted. 10. An is a right to buy or lease property at a specified price during a certain period of time. The owner who is giving the right is called the. To create a valid, something of value must be given to keep it open, and once given it cannot be revoked or withdrawn until it expires. 11. A Right of gives the right to buy or lease only if the owner decides to sell or lease. The owner is not required to sell or lease the property to this person, however. 12. To be binding, a contract must exchange something of value, called. It does not have to be, and need not have monetary value, but must have. 13. Although a contract may have been formed correctly - with offer, acceptance and consideration - it may have a that occurred in formation (i.e., mistake) or with the parties (i.e., incompetence) that would allow it to be voided. 14. A contract is if it fails to meet a fundamental contractual requirement. If one of the parties is still bound to the agreement, even though the other may elect out, this contract is merely. 15. A contract of an purpose is void. Copyright All Rights Reserved 2 Real Estate Law & Practice (48 credit hrs)

3 16. Persons who do not have sufficient mental or legal are considered to contract. 17. In Colorado, any agreement with a (except those for "necessities") is considered, meaning that the other party is bound to perform, if the affirms the contract. 18. According to the Statute of, every real estate contract must be in to be, as well as: Any lease for more than one ; promises to pay for the of another; promises made in contemplation of ; contracts for the sale of property over $ According to the doctrine of, if a party has acted in reliance on a promise, the other party may not disavow that promise. 20. The Evidence Rule says that a final contract may not later be altered or contradicted by or negotiations that occurred before the contract was created. 21. The Statute of sets a legal period of where a contract may be or legal action brought. If action is not taken by then, the right to do so is lost. 22. A mistake is on the part of only one party, and does not allow them to void the contract. A mistake means both parties were in error, and the contract may be voided by both. 23. Contracts entered into under physical may be voided by the injured party. 24. An intentional misleading statement that leads to one party's harm is called. This also applies to a material (important) defect. 25. is the misstatement or concealment of an important fact, leading the other party to act to their detriment. Unlike fraud, to deceive is not necessary. The contract would not be voidable if the party to whom the statement was being made that it was false. "Puffing" is merely a statement of, and is usually not sufficient to void a contract. 26. Undue may void a contract, because of one party's overpowering with the other. 27. Occasionally, a court may refuse to enforce a contract if it is shockingly unfair to one party. This is called a(n) contract. 28. After a valid contract has been formed, failure of a party to comply with the material terms is called of contract. Copyright All Rights Reserved 3 Real Estate Law & Practice (48 credit hrs)

4 29. Money awarded to the injured party to make up for the loss suffered is called damages. 30. The injured party is responsible for keeping the amount of damages as low as possible. This is. 31. Courts may award damages in excess of compensatory damages in order to punish the offending party. These are called or damages. 32. If a court awards a token amount for a breach where no actual monetary loss is suffered, this is called damages. 33. damages is compensation agreed upon at the time of contracting in the event of breach. In the event of breach, if this money amount is not sufficient, the court may force the parties to actually perform the contract as originally contracted. This is called. 34. A(n) is a court order to cease and desist a certain activity. 35. A court may be asked to issue relief, deciding an issue before damages occur. 36. is an action to correct an agreement or deed to conform to the original intention. 37. cancels the contract and returns the parties to their pre-contract positions. The return of consideration at this time is called. 38. A party can a breach and elect to continue with the contract. 39. When the parties agree to accept a lesser consideration, this is called "accord and. 40. An is the transfer of the interests of one of the parties to the contract to a third. A(n) service contract cannot be, because the other party specifically contracted for that party's services. The "stands in the shoes" of the assignor and becomes primarily for the contractual duties of the assignor. However, the assignor remains secondarily to the other party if the fails to perform. 41. is the substitution of a new contract for the old one between the same parties, or a substitution of a new party into the old contract. 42. A contract is where both parties make promises to perform and both parties are bound to the terms of the contract. However, a contract binds the second party to perform if the first party acts. A "reward" situation is an example of this. (Such as: "reward for information leading to the arrest..." You or the public are not contractually bound to provide any Copyright All Rights Reserved 4 Real Estate Law & Practice (48 credit hrs)

5 information, but if you do provide information, the offeror must live up to their contractual offer of a reward.) 43. A(n) contract is one that is still in the process of being performed, while a(n) contract has been fully performed. This distinction is important because a fullyperformed contract cannot then be "breached" and damages cannot be awarded. 44. A(n) contract is one where both parties intend to be bound and specifically agree to the terms of a contract. Whereas if you must look at the actions of the parties to determine if there is an agreement, this constitutes a(n) contract. 45. If the meaning of terms in a contract are difficult, that contract is, and the court will have to determine the original of the parties. If this is impossible, the contract is because it lacks the fundamental requirement of mutual. 46. When trying to interpret a contract, portions take priority over pre-printed or portions, and additions take priority over the pre-printed form. If there is a disparity, a spelled-out (written) number takes precedence of. The version of a contract takes precedence over an earlier version. errors are usually disregarded, and are usually interpreted against the party drafting the contract. 47. List three matters that are essential in each real estate contract. a. ; b. ; c If not specifically covered in the contract, state the rule as to each of the following: a. Type of Deed ; b. Merchantable Title ; c. Default Provisions ; d. Possession ; e. Risk of Loss. 49. "Time is of the Essence" simply means that the material elements in a contract must be performed by the time. If not performed by the time specified, the following remedies may apply: a. ; b In the contract approved by the Real Estate Commission, the remedies depend upon the checked in the contract. The particular Section in the Commission- approved Contract to Buy and Sell Real Estate (Residential) is Paragraph There are two ways that seller's original loan will stay on the property after selling to buyer. The first is where the buyer who takes over the loan is responsible for payment. This is where buyer Copyright All Rights Reserved 5 Real Estate Law & Practice (48 credit hrs)

6 " and agrees to." If the seller is still primarily liable for the loan, buyer has taken title to the property " to" the existing mortgage. Some unscrupulous buyers take an interest in property while agreeing to pay the seller's loan, collect rents without paying on the loan, let the property go to foreclosure and skip town. This is called " Skimming" and is a Class 4 in Colorado. 52. Presenting a false contract to the lender with a higher purchase price than the price shown on the contract, is called contracting, and is a crime. 53. An installment land contract is also known as a for deed. According to the former "Statement of Policy Concerning Rule F, Installment Land Contracts do fall within the purview of Rule F, but there is not an approved form. Therefore a licensee should/should not deal with this form of contracting. 54. When an installment land contract has been signed, the buyer has what type of title?. The seller?. 55. An installment land contract is often used in periods of " " money. It is also used when the purchaser has little or no down payment to make on the property. 56. Should a buyer record an installment land contract?. 57. The seller (vendor) under an installment land contract has an interest in property, and the buyer (vendee) has a property interest. 58. If a seller wishes to assign his interest in an installment land contract, the seller will use a formal of the contract. Often the buyer, by terms of the contract, will be prohibited from transferring the contract to someone else. 59. At the time the contract is signed, the seller should place a deed in. This deed will be delivered when the buyer has paid all or a major portion of the purchase price. If the buyer does sell his interest in the contract to a third party, another deed from the to the third party should be placed in escrow. 60. The sale of a mobile home is/is not a sale of real estate. 61. In the sale of a mobile home, is licensing as a real estate broker required?. 62. How is title conveyed to mobile homes and modular homes?. 63. Mobile homes and modular homes are both considered to be homes and the seller must furnish the buyer a of. 64. When a manufactured home is permanently to the land, the owner may surrender the Certificate of Title and the owner then becomes a real property owner. Copyright All Rights Reserved 6 Real Estate Law & Practice (48 credit hrs)

7 CHAPTER 1 QUIZ 1. All of the following elements are always necessary to make a contract, except: a. consideration; b. be in writing; c. legal purpose; d. competent party. 2. Mutual assent consists of all of the following, except: a. offer; b. reality of consent; c. competent parties; d. acceptance. 3. Which of the following contracts always falls under the Statute of Frauds? a. Contract made in consideration of marriage; b. Contract for the sale of personal property; c. Contract for a legal purpose; d. Contract for an illegal purpose. 4. The law that requires certain kinds of contracts to be in writing is called: a. Statute of Limitations; b. Parol Evidence rule; c. Statute of Frauds; d. Rule Involving Laches. 5. Which of the following is usually a competent party to enter into a contract? a. Insane person; b. Someone 17 years of age; c. Intoxicated person; d. None of the above. 6. Which of the following is always essential to a contract? a. Description of the property; b. Type of deed; c. Date of possession; d. An option. 7. The sales contracts used by brokers are called: a. Preliminary contracts; b. Earnest money contracts; c. Executory contracts; d. All of the above. Copyright All Rights Reserved 7 Real Estate Law & Practice (48 credit hrs)

8 8. An installment land contract is: a. required for all land sales; b. contained in a Commission-approved form; c. the safest method of transferring title; d. under the purview of Rule F. 9. A mobile home: a. is conveyed by general warranty deed; b. requires a real estate license to sell; c. is conveyed by Certificate of Title; d. requires a modular housing license to sell. 10. Under an installment contract, the buyer holds what kind of title? a. No title; b. Legal title; c. Both legal and equitable title; d. Equitable title. Copyright All Rights Reserved 8 Real Estate Law & Practice (48 credit hrs)

Classifying Contracts. Contracts can be created orally.

Classifying Contracts. Contracts can be created orally. Contracts 1 Classifying Contracts Contracts can be created orally. 2 Classifying Contracts Contracts can be created in writing. 3 Classifying Contracts The Statute of Frauds states that most real estate