Chapter 6 Quiz PDF

Chapter 6: Contract Law Chapter 6 Quiz 1. Something of value exchanged by the parties 5. Which of the following elements is not neces- is: sary to the existence of every contract? A. Consideration...

Chapter 6: Contract Law Chapter 6 Quiz 1. Something of value exchanged by the parties 5. Which of the following elements is not neces- is: sary to the existence of every contract? A. Consideration A. Mutual consent B. Just compensation B. In writing C. Legal description C. Parties capable of contracting D. Fiduciary duties D. Lawful objective 2. A contract for the purchase of a commercial 6. Which of the following types of contracts can- property has mutual consent, consideration, not be assigned (unless there is an agreement and a legal objective. The contract, however, is to the contrary)? FRQGLWLRQHGRQWKHEX\HU¿QGLQJDWHQDQWIRUWKH A. Lease building within two months. This contract is: B. Fire insurance policy A. illusory C. Mortgage B. enforceable D. Option C. unenforceable D. voidable   $\HDUROGPLQRURZQHGDORWDQGDVNHGKLV father to sell the property. The father gave a 3. A minor who owned property approached a OLVWLQJWRDEURNHUZKRWKHQVROGWKHSURSHUW\ EURNHUWRDVVLVWLQWKHVDOHRIWKHSURSHUW\7KH This transaction was: EURNHUPD\QRWDFFHSWDOLVWLQJIURPWKHPLQRU A. valid because the father arranged the trans- because: action A. a minor is incapable of appointing an B. voidable by the minor agent C. void because a minor cannot sign a real  % WKHPLQRUPD\EHDEOHWRGLVD൶UPDUHDO estate contract estate contract later  ' YRLGEHFDXVHRIWKHIDWKHU¶VLQYROYHPHQW  & DEURNHULVLQFDSDEOHRID¿GXFLDU\UHODWLRQ- ship with a minor 8. A contract that is executory is a: D. it is illegal for a minor to enter into any sort of contract A. binding written contract B. contract that contains a promise for a promise 4. A man acquired a parcel of real property before C. contract that has not yet been fully per- his arrest and conviction. While in prison, he formed wished to convey the property to his son. May D. contract that has been fully performed he do so? A. An incarcerated prisoner no longer has the 9. If an agreement to transfer real estate is only capacity to contract made orally, it is: B. He may convey the property only with the permission of the state Department of Cor- A. always enforceable rections B. enforceable in unusual circumstances C. Any property owned by a convicted felon C. always unenforceable is automatically seized by the state for D. voidable compensation of crime victims D. He may convey the property without per- mission 9  Principles of California Real Estate Instructor Materials 10. If a contract has been rescinded, that means 15. Which of the following would terminate an that it has been: R൵HUWRSXUFKDVHDKRXVH" A. rewritten  $ 5HMHFWLRQE\WKHR൵HURU B. annulled  % 5HMHFWLRQE\WKHR൵HUHH C. rejected  & 5HYRFDWLRQE\WKHR൵HUHH D. performed  ' ,QTXLU\ E\ WKH R൵HUHH DV WR ZKHWKHU WKH R൵HURUZLOODFFHSWGL൵HUHQWWHUPV 11. In which of the following circumstances would a deed always be void?  $ $IRUJHGGHHGLQWKHKDQGVRIDERQD¿GH purchaser B. A deed signed by an incarcerated convict C. A deed signed by an unmarried person under age 18 D. A deed that is not supported by consider- ation 12. Which of the following contracts would not be required under the statute of frauds to be in writing? A. An agreement to rent a property for a ten- year term B. An agreement to purchase timber that will be cut in two years C. An agreement between a principal and an agent to buy real property D. A partnership agreement to sell real prop- erty 13. Scott agreed unconditionally to perform his part RIDSXUFKDVHFRQWUDFW7KLVLVNQRZQDVDDQ A. covenant B. condition C. tender D. anticipatory repudiation 14. In a contract, the meeting of the minds between buyer and seller is evidenced by what? A. Consideration  % $FNQRZOHGJPHQW C. Performance  ' 2൵HUDQGDFFHSWDQFH 10  Chapter 6: Contract Law Answer Key 1. A. Consideration is something of value 9. B. An oral contract for the sale of real exchanged by the contracting parties. property may be enforceable in certain circumstances, such as if the purchase 2. B. A valid contract may be enforceable price has already been paid or the con- even if it contains conditions. tract has been partially performed. 3. A. A minor may not appoint an agent 10. B. Rescission annuls a contract. In other because a minor does not have the ca- words, it invalidates the contract and pacity to contract. SXWVWKHSDUWLHVEDFNDVFORVHO\DVSRV- sible to where they were before the 4. D. Generally, a convict may acquire contract was made. and convey property freely. The only exception would be if the transfer of 11. A. A forged deed is always void, even if in property poses a threat to public safety. the hands of a good faith purchaser. A convict may convey property unless it 5. B. Not all contracts are required to be in would pose a threat to public safety. An writing, although contracts concern- unmarried person under 18 would or- ing real estate must comply with the dinarily not be able to sign a real estate statute of frauds. The four necessary contract, but a person under 18 who elements for a valid contract are mu- has married and then divorced would tual consent, capacity, consideration, be legally emancipated and thus have and a legal objective. contractual capacity. A deed does not require any consideration to be valid.  % +D]DUGLQVXUDQFHLVEDVHGRQVSHFL¿F qualities of the insured person and the 12. D. An agreement between partners to buy insured property, so it is not assign- or sell real property would not need able. Typically, a policy is terminated to be in writing. An agency agreement upon sale of a property, and a new to buy or sell real property, however, policy is issued. would need to be in writing. Any agreement that will not be performed 7. C. While other types of contracts are within one year also needs to be in voidable by minors, a real estate con- writing. tract signed by a minor is void at its inception. & $QXQFRQGLWLRQDOR൵HUWRSHUIRUPLV a tender. A person who is party to a 8. C. An executory contract is in the process FRQWUDFWPXVWPDNHDWHQGHUEHIRUHWDN- of being performed. An executed con- ing legal action against the other party tract, by comparison, is one that has for breach of contract, unless the other been completely performed. party made an anticipatory repudiation. 11  Principles of California Real Estate Instructor Materials ' 2൵HUDQGDFFHSWDQFHGHPRQVWUDWHVD meeting of the minds between buyer and seller, indicating that a contract has been formed. % 5HMHFWLRQE\WKHR൵HUHHWHUPLQDWHV DQR൵HU$QR൵HURUFDQQRWUHMHFWDQ R൵HU KHZRXOGUHYRNHLW ZKLOHDQRI- IHUHHFDQQRWUHYRNHDQR൵HU KHZRXOG reject it). And an inquiry as to the of- IHURU¶VÀH[LELOLW\GRHVQRWVHUYHDVD FRXQWHUR൵HU 12