1. When an existing contract is replaced with an entirely new contract, it is called:
A. rescission
C. novation
B. assignment
D. subordination
2. An agreement that is made either verbally or in writing is known as a(n):
A. express contract
C. implied contract
B. mutual consent
D. all of the above
3. Which of the following are classifications of contracts?
A. Valid
C. Voidable
B. Unenforceable
D. All of the above
4. Which of the following is FALSE concerning deposit receipts?
A. They must be accompanied by a deposit of money or other items of
value.
B. It is also called the California Residential Purchase Agreement
C. An agent must give a copy to both buyer and seller.
D. Promissory notes and post-dated checks are never acceptable as consideration
for deposit.
5. Which of the following is NOT considered a basic element of any contract?
A. Enforcement
C. Capacity
B. Mutual consent
D. Consideration
6. A signed written contract takes precedence over oral agreements or prior written agreements based on:
A. the
performance rule
C. the statute of
frauds
B. English
common law
D. the
parole evidence rule
7. Consideration can best be described as:
A. money paid in a contract
C. anything of value
B. good will
D. not necessary in a valid contract
8. What is always true about a counter offer?
A. It is made by the buyer C. It terminates the previous offer
B. It is made by the seller D. The previous offer is still valid
9. A remedy for breach can be: (Pg. 124)
A. a unilateral rescission
C. an acceptance of breach
B. an action for damages
D. all of the above
10. Which of the following is FALSE concerning options?
A.They can be revoked at any time by the optioner (seller), without
penalty.
B. They have specific terms.
C. They have specific time periods.
D. They are granted in exchange for money.
11. A copy of the deposit receipt should be given to:
A. all parties involved
C. the seller’s broker only
B. the Real Estate Commissioner
D. the buyer’s attorney first
12. If one of the parties doesn’t go through with a contract (nonperformance), it is called a(n):
A. assignment
C. consideration
B. breach
D. operation of law
13. A written contract between two parties is:
A. express and unilateral
C. express and bilateral
B. implied and bilateral
D. implied and unilateral
14. Any contract that can’t be performed within one year from the date of signing:
A. is illegal
C. is a failure to perform
B. must be in writing
D. is an example of duress
15. An assignment:
A. is only for personal service
C. is a new contract
B. transfers only liability
D. transfers the right to contract
16. Of the following, which most nearly means the same thing as “rescind?”
A. Arrest
C. Terminate
B. Reword
D. Fulfill
17. Which of the following is used to change the original terms of the deposit receipt?
A. Covenant form
C. Counter offer form
B. Contingency form
D. Substitution form
18. A provision in a contract stating the purchase depends on the buyer qualifying for a loan is called a:
A. loan back-out clause
C. “subject to” provision or contingency clause
B. covenant
D. all of the above
19. If a contract is said to be “executory,” it:
A. is court ordered
C. has been discharged or performed
B. has not yet been performed
D. has not yet been signed
20. Which of the following is NOT a remedy for breach of contract?
A. Unilateral rescission
C. Action for dollar damages
B. Specific performance
D. Partial performance