REE 4433 EXAM 2 Bailey FSU (Case Studies/Test Bank)

Donna and Ray enter into an agreement whereby Donna is to purchase Hellacre. Before closing, the house on Hellacre burns down.

D. In the absence of a provision in the contract covering this event, the parties would be excused from performance because the subject of the contract has been destroyed.

John assigned his right to receive a deed from Trudy to Hannah.

Hannah will be entitled to the deed.

Consideration is a necessary element of a contract except when

the doctrine of promissory estoppel is applicable.

Harry offers in writing to sell Lynn Blackacre. Lynn accepts, thinking that the offer refers to Greenacre. In fact, Harry made the offer thinking that it referred to Greenacre. Either party may rescind the contract because

both parties had a mistaken belief about a material matter in the contract.

Builders, Inc. contracted with Allison to build her home for $200,000 in accord with specifications stated in the contract. After Builders started construction, the price of particular masonry block required in the contract and imported from a foreign country skyrocketed due to an unforeseeable shortage caused by civil war. As a result, it would cost Builders $200,000 just to obtain the block. Which of the following is Builder's best argument to excuse it from performance?

Commercial impracticality

Where an offer to contract is made by mail, acceptance takes place at the time

the offeree deposits the acceptance in the mail.

On July 1, Thomas sent an offer by mail to sell Panacre to Mariah for $170,000. Mariah received the offer and deposited the letter of acceptance in the mail on July 3. Later that day, Thomas called Mariah and said, "I revoke my offer."

There was a contract formed on July 3.

An offer is terminated when

the offeree makes a counteroffer.

Pamela contracts with Bronwyn to build a house. Pamela specifies in the contract that the house is to have a fireplace. Bronwyn completes the house without a fireplace. Pamela refuses to pay Bronwyn. In court,

Pamela will lose because Bronwyn substantially performed and Pamela will have to pay Bronwyn the contract price less the cost of the fireplace.

A person who is adjudicated insane

has no capacity to enter into a contract

Mr. Jones agreed to purchase Wax City, an auto detailing service, from Mr. Anderson with a contract that was signed on April 20, with closing set for September 10. During the summer, sales in Wax City to plummeted, the market value of Wax City dropped and Jones defaulted on the sales contract. Will damages be due to Anderson?

Yes, Anderson is entitled to Jones's earnest money and the difference between the purchase price and the market price.

Which of the following is not needed to satisfy the Statute of Frauds?

Proof of marketable title

The parol evidence rule

does not exclude the introduction of evidence of a subsequent agreement that alters the previous writing.

The writing that contains essential terms in satisfaction of the statute of frauds is referred to as the

memorandum.

The date the buyer is entitled to possession of the real property is

governed by the contract.

Mills was old. He contacted the Handbergs and orally agreed to will his farm to them if they moved in with him and took care of him and the farm. They did. The Handbergs are

entitled to the property because of the part performance doctrine.

Some states prevent a real estate broker from drafting a purchase contract because it

constitutes the practice of law.

When a general warranty deed is used in a real estate transaction, the seller warrants that the property is free and clear of encumbrances through

personal warranty.

If the parties to a contract agree within the contract that time is of the essence,

a day's delay on the part of a party would be deemed a breach of contract.

The Statute of Frauds requires that

certain contracts be evidenced by a writing.

Under the seller assist program

in a conventional loan the seller is limited to paying 3% of the buyer's closing costs

Which of the following activities demonstrates a broker's responsibility for being the procuring cause of a sale?

Introducing the buyer and seller

Foster is the agent for the seller of a large home that has been in one family for 50 years. Foster noticed that the roof of the sun porch leaked during an unusually heavy storm. The owners reacted with surprise, noting that it had never happened before. What is TRUE about Foster's liability in this situation?

Foster is responsible for having the leak repaired

A real estate sales associate

is an employee, as he or she is required by law to be associated with a broker.

In most states, a broker is not entitled to a commission until

the broker submits a binding offer from a financially able buyer.

The word able in the expression ready, willing, and able refers to the

financial ability of the buyer to complete a transaction.

Which of the following does not accurately describe real estate brokers?

They often sue to collect commissions

A buyer's broker

owes fiduciary duties to the buyer.

A designated agency

requires the utmost sensitivity and confidentiality within the brokerage firm in order to maintain independent agent representation

It is illegal for brokers to

informally agree to charge the same commission.

The exclusive right to sell differs from the exclusive agency in that the exclusive right to sell

entitles the broker to a commission even if the seller procures the buyer.

Multiple listing services are

based upon agreements among brokers.

Which of the following actions is NOT required for brokers to meet the good faith and loyalty duties to the seller?

Perform all tasks related to the transaction and property alone.

The exclusive right to sell differs from the exclusive agency in that the exclusive right to sell

entitles the broker to a commission even if the seller procures the buyer.

In the term ready, willing, and able, ready means that the buyer

intended to buy at the time the contract was made.

A broker usually works as an independent contractor in that he or she

controls the manner in which the job is done.

The agency relationship between the seller and the broker is created with the

listing.

Which of the following statements best describes a broker's implied authority?

The broker is bound as an agent to obey the directions of the principal.

Some courts take the position that part performance is satisfied if the purchaser

takes possession of the property pursuant to an oral contract.

Which of the following contingencies benefits the seller?

Seller's purchase of a home.

Which of the following elements should be included in a real estate purchase contract?

Signature of the seller's spouse

Courts will not allow recovery for fraud based upon an opinion expressed by

a salesperson naturally commending the item he or she is selling.

Reliance upon a false statement

is not justified if the information is inconsequential to the transaction.

Harold knew that mineral deposits on Tyson's land were valuable. Tyson knew that the deposits were there but did not know they were valuable. Without divulging his knowledge, Harold bought the land from Tyson. It is true that

Harold is under no obligation to Tyson to reveal the potential value of the mineral deposits on the property

Cindy, who was selling her home, stated that a new school was to be built in the neighborhood. Cindy believed this to be true based upon published information; however, unknown to Cindy, plans to build the school had been changed. Cindy's property was purchased by Daniel, primarily because Daniel and his wife felt their children's school was unsafe. Daniel

may be able to rescind the contract if Daniel can prove that the school location was a material fact and that Daniel's reliance on Cindy's statement was justified.

Generally, to recover damages in an action for fraud

an actual monetary loss must be proved.

Puffing is not actionable as fraud because courts

treat it as an expression of opinion.

An action for fraud

can be based on an action, failure to act, concealment or silence.

The great impact of deceptive acts in the area of real estate is due to

the large amount of information passed between a buyer and seller through a third party.

the large sums of money involved in most real estate transactions.

the statutory supervisory responsibility placed on brokers.

Waiver of the right to sue for deceit

usually occurs upon the inaction of a person upon discovery of the fraud.

The technical term used to refer to knowledge that a statement is false, or disregard for its truth or falsity is

scienter.

To qualify for a mechanic's lien, work or materials must result in

a permanent benefit.

A vendor's lien arises if the buyer does not pay the full price for property and the seller

takes no other security

Judgment liens can be considered the court's way of helping

plaintiffs collect their money judgments

One example of a voluntary lien is a

real estate mortgage.

For a property to be subject to a mechanic's lien, most states require that improvements be made

with the consent and knowledge, or at the request, of the owner.

If a property is subject to a mechanic's lien, a purchaser

takes title subject to the lien

Notice and filing are two common requirements

for perfecting a mechanic's lien.

The seizing of a defendant's property by legal process, to be held by the court to ensure satisfaction of any judgment that might be awarded is known as

an attachment.

The Pennsylvania Rule and the New York Rule both pertain to the lien rights of

subcontractors.

In some sections of the United States, a vendor's lien is extended to a person who

sells real restate under a land contract.

Carter entered into a lease with Dianne. The lease had a 10-year term and Carter agreed to make some structural changes to the premises. The changes were made by Liddia, a contractor, who was not paid the entire amount due for her work. Liddia

would be able to file a mechanic's lien against the interests of both Carter and Dianne.

Some states do not require a mechanic to file a lien if the mechanic

sues for the sum owed.

The most common way in which liens are terminated is through

payment of the obligation

A township is approximately

6 miles square.

Which of the following calls used in a metes-and-bounds description is given the highest preference by the courts?

Natural monument

A plat book is a

part of the public record.

The fundamental principle applied by courts in settling boundary disputes is the

intention of the parties.

If a plat and physical boundaries fixed by a survey differ,

the physical boundaries prevail.

In the rectangular system of subdividing, each township is designated by

two numbers and two directions.

Once land has been conveyed on the basis of a government survey,

the conveyance will not be disturbed.

Metes and bounds descriptions

may be used in conjunction with the rectangular survey.

The general order of preference given to calls when the intention of the parties is not clear is

natural monuments, artificial monuments, courses, distances, quantity of acreage.

A section consists of

640 acres.

Which of the following is sufficient to constitute delivery of a deed?

Intent to pass title and surrender of the instrument

Which of the following is a variation of the general warranty deed?

Limited warranty deed

A provision in a deed limiting uses that may be made of the property, a violation of which results in liability in damages, is

a restrictive covenant.

Mr. Robins purchased a property and the deed conveyed title to him, but it had no warranties. Which of the following deeds did Mr. Robins receive?

Bargain and sale

A bargain and sale deed conveys

title with no warranties.

A person who conveys title by warranty deed is called

a grantor.

The five customary covenants are found in a

general warranty deed.

A deed to be valid must be signed by the

grantor.

The primary method of transferring title to real estate is the

deed.

During sales conversations, Mr. Eugenio Robledo explained that his granddaughter, who calls herself Lucy Robledo, was actually named after Mr. Robledo's mother—Maria de la Luz Fonseco Robledo. As documents are prepared to transfer land from Mr. Robledo to Lucy, knowledge of her legal name will help create a valid deed by providing

an identifiable grantee.

The covenant of quiet enjoyment is similar to the covenant of

warranty.

The act of witnessing the execution of a deed and subscribing as a witness is called

attestation.

In order for delivery of a deed to be effective

the grantor must part with legal control of the instrument.

Unlike a warranty deed, a quitclaim deed does not

convey title.

An element not essential to a deed is

consideration.

A person appointed to administer the estate of a decedent who dies testate is

an executor.

The prevailing U.S. policy to encourage provisions for the spouse and children out of a decedent's estate has resulted in

elective share statutes.

Which of the following is not necessary for an ordinary will to be valid?

Recorded

The elements necessary to establish a claim of adverse possession are expressive of the judicial and legislative intention that the possession be

sufficiently evident to give the owner notice of what is happening.

The Statute of Distribution pertains to

kinship.

Property escheats to the state

when a person dies intestate with no heirs.

The division by a court of the personal property of one dying without a will is called

distribution.

The federal and state governments may delegate the power of eminent domain as long as the property

will be devoted to public use.

According to the text, the owner of vacant land can protect ownership rights against adverse possessors by

inspecting the property periodically.

The Kelo case decided by the United States Supreme Court

gives state governments a great amount of power to take private land for public economic benefit

Elsa Schmidt died intestate. She was survived by her son Hans and two grandchildren, Wilfred and Sophia. Wilfred and Sophia were the children of Elsa's son Wolfgang, who died before her. If division of Elsa's estate were per stirpes, Wilfred and Sophia would each receive

one-quarter of the estate.