Arizona Real Estate License Contract Law and Practice 4

Question 1

An option contract in real estate gives the optionee:

Accepted Answer

The right, but not the obligation, to buy within a set period

Answer

An option grants the right without obligation to purchase during a specified time for consideration.

Question 2

In a contract for deed (land contract) in Arizona, legal title to the property:

Accepted Answer

Remains with the seller until the buyer completes payments

Answer

Under a contract for deed, the seller retains legal title until the buyer fulfills the payment terms.

Question 3

If both parties mutually agree to terminate a contract and return to their pre-contract positions, this is called:

Accepted Answer

Rescission

Answer

Rescission cancels the contract and restores the parties to their original positions.

Question 4

A seller's failure to disclose a known material latent defect in Arizona can expose the seller to:

Accepted Answer

Liability for misrepresentation or fraud

Answer

Failing to disclose known material latent defects can result in liability for fraud or misrepresentation.

Question 5

The transfer of contractual rights to another party, where the original party may remain secondarily liable, is:

Accepted Answer

Assignment

Answer

Assignment transfers rights to a third party while the assignor may remain secondarily liable.

Arizona Real Estate License Practice Test