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43 multiple-choice questions and 50 flashcards on Contracts, about 5% of the Real Estate License bank. Every one carries a written rationale.
Contracts is one of 13 chapters in CoStudy's Real Estate License bank, and it holds 43 of the bank's 796 multiple-choice questions — roughly 5% of the total. That proportion is not arbitrary: chapters follow the certifying body's published exam outline, and the number of questions in each is set by that domain's published weight, so the share of your practice time this chapter takes matches the share of the real exam it accounts for.
Studying by chapter is worth doing once you have a diagnostic score. A single overall percentage tells you whether you are close; it does not tell you which domain is dragging. Working a weak chapter in isolation, and re-testing it in isolation, is the fastest way to move a score that has stalled — and it is why the mock exams in CoStudy report by domain rather than as one number.
10 questions drawn from this chapter, with the full rationale shown — the controlling principle behind the right answer, and why each wrong option tempts and fails.
$600K contract warrants "roof under 5 years." Buyer finds roof is 15 years. Which is NOT available to buyer?
Answer: C — Specific performance forcing new roof
A) Rescission valid. B) Damages valid. C) Correct — SP does not force post-closing repair. D) Warranty valid.
Which is NOT an essential element of a valid contract?
Answer: D — Notarization of each signature by a public notary
A) Wrong - required element. B) Wrong - required element. C) Wrong - required element. D) Correct - notarization not required.
A financing contingency in a purchase and sale agreement typically does what?
Answer: B — Conditions closing on financing; allows exit if loan cannot be obtained
A) The contingency does affect obligations. B) Correct — allows exit if loan fails despite good-faith effort. C) That defeats the purpose. D) The two contingencies are separate.
Merger clause: writing is complete agreement. Buyer tries to enforce prior oral washer/dryer promise. Result:
Answer: B — Parol evidence rule bars prior promise
A) Barred by parol evidence + merger. B) Correct — barred. C) Not required. D) Fraud has limits.
Offer: "contingent on attorney approval within 5 business days." Day 3, attorney disapproves in writing. Result:
Answer: D — Attorney disapproval terminates deal
A) Attorney review subjective. B) No extension. C) No cure period. D) Correct — clause terminates.
Contract requires closing June 30 "time is of the essence." Buyer tenders July 3; seller refuses. Result:
Answer: C — Buyer is in breach for missing deadline
A) TOE is strict. B) De minimis fails under TOE. C) Correct — buyer breaches. D) Not automatic.
Which is most likely enforceable as LIQUIDATED DAMAGES rather than an unenforceable penalty?
Answer: C — A modest 1% earnest money forfeit
A) Grossly disproportionate. B) Flat huge fee. C) Correct — modest earnest is standard. D) Open-ended is penalty.
A time is of the essence clause means that:
Answer: A — Deadlines are strictly enforced or breach occurs
A) Correct - strict enforcement. B) Wrong - that is default. C) Wrong - extensions need agreement. D) Wrong - all deadlines strict.
Buyer assigns purchase contract to LLC pre-closing; contract silent on assignment. Under majority rule, assignment is:
Answer: C — Permitted — buyer may assign contract
A) Real-estate contracts assignable. B) No recording rule. C) Correct — generally assignable. D) Assignment ≠ novation.
A "subordination" agreement changes lien priority so a:
Answer: A — Previously senior lien steps behind
A) Correct — senior yields priority. B) Junior does not need it. C) Not a discharge. D) Fully effective.
4 cards from the 50 in this chapter.
A contract clause states that if the appraisal comes in below the purchase price, the buyer may cancel. This is:
An appraisal contingency — a condition that must be satisfied for the contract to proceed.
A bilateral contract in real estate is one where:
Both parties exchange promises. Example: a purchase agreement — the buyer promises to pay, the seller promises to convey title.
What is consideration?
Something of legal value exchanged between parties (money, goods, services, or a promise). Required for contract validity.
When is earnest money typically required?
Earnest money is not legally required for a valid contract — consideration can be a promise. However, it is customary and demonstrates the buyer's serious intent.
These are a sample. The full Contracts chapter runs 93 items with per-chapter progress tracking, on the web and in the iOS app.
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