Champions School Of Real Estate-Law
Of Contracts Exam 1 Questions And
Answers With Verified Solutions 100%
Correct!!!
Default of Contract - ANSWER✔✔ When a party to a contract fails to perform
under the contract, also known as breach of contract.
Buyer Default(Remedies) - ANSWER✔✔ In the event of default by the buyer, the
seller may have several options which include:
-Liquidated Damages
-Monetary Damages
-Specific Performance
Liquidated Damages - ANSWER✔✔ The seller can choose to accept the buyer's
earnest money as liquidated damages, releasing all parties from any further
obligation under the contract. Liquidated damages are damages that are established
in the contract.
Monetary Damages - ANSWER✔✔ In addition to specific performance, the
injured party may "seek such other relief as may be provided by law." This would
be an award of monetary damages by the court. Because monetary damages are
awarded by the court, one never knows what they will be until the court rules.
Specific Performance - ANSWER✔✔ The injured party files a court action
seeking an order of the court directing the defaulting party to perform according to
the terms of the contract. Specific performance is the only remedy that would
possibly result in the full execution (closing) of the transaction.
,Buyer Default - ANSWER✔✔ In the event of default by the buyer, the seller may
have several options which include:
-Liquidated Damages
-Monetary Damages
-Refund of Earnest Money
Refund of Earnest Money - ANSWER✔✔ The buyer's acceptance of an earnest
money refund terminates the contract, releasing both parties from any further
obligation under the contract. Because this is a refund of the buyer's earnest
money, this cannot be considered liquidated damages.
TREC has only two promulgated lease forms: - ANSWER✔✔ 1. Buyer's
Temporary Residential Lease
2. Seller's Temporary Residential Lease
Buyer's Temporary Residential Lease - ANSWER✔✔ For use when the buyer
occupies the property for
no more than 90 days prior to closing.
Seller's Temporary Residential Lease - ANSWER✔✔ For use when the seller
occupies the property for no more than 90 days after closing.
Right of First Refusal - ANSWER✔✔ Gives the tenant the right to purchase the
leased property by matching or bettering any offer before the property will be sold
to someone else.
-TREC does not have promulgated forms for this.
, Lease-Purchase Agreement - ANSWER✔✔ Gives the tenant occupancy in the
present time and the right to purchase at a future date. In an option to purchase, the
price is set when the lease agreement is negotiated, which is advantageous to the
tenant-buyer.
-TREC does not have promulgated forms for this.
TVLB (Texas Veteran's Loan Program) - ANSWER✔✔ To participate in the
program, the veteran obtains an FHA, VA, or conventional loan from a
participating lender. The qualification process is the same as for any other FHA,
VA, or conventional loan. The difference is that the loan is sold to the Texas
Veterans Land Board (VLB), as opposed to a secondary market purchaser such as
Fannie Mae or Freddie Mac. The primary benefit to the veteran is that the rate on
the Veterans Land Board loan is often up to one percent below prevailing market
rates.
Physical Characteristics of Land - ANSWER✔✔ 1. Indestructibility or durability
2. Immobility
3. Nonhomogeneity
Economic Characteristics of Land - ANSWER✔✔ 1. Scarcity
2. Modification
3. Fixity
4. Stitus
Indestructibility or Durability - ANSWER✔✔ Refers to the fact that land cannot be
destroyed
Immobility - ANSWER✔✔ Refers to the fact that land cannot be moved.
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