Arkansas Real Estate License Arkansas Real Estate License Real Estate Contracts Questions and Answers 2 — Questions and Answers
Question 1: Under Arkansas law, what is the statute of limitations for filing a breach of contract claim related to a written real estate agreement?
- 3 years
- 5 years (Correct answer)
- 7 years
- 10 years
Correct answer: 5 years
Arkansas imposes a five-year statute of limitations on actions arising from written contracts.
Question 2: Which of the following would most likely render an Arkansas real estate contract voidable?
- The property is located in a flood zone
- One party was under duress at signing (Correct answer)
- The contract was not notarized
- The buyer did not obtain a home inspection
Correct answer: One party was under duress at signing
A contract signed under duress is voidable at the option of the party who was coerced.
Question 3: In Arkansas, what happens if a real estate purchase agreement does not specify a closing date?
- The contract is automatically void
- Closing must occur within 30 days
- Closing must occur within a reasonable time (Correct answer)
- The seller may choose any date
Correct answer: Closing must occur within a reasonable time
When no closing date is specified, Arkansas courts require performance within a reasonable time under the circumstances.
Question 4: Which clause in an Arkansas real estate contract allows the buyer to cancel if they cannot secure financing by a specified date?
- Escalation clause
- Financing contingency clause (Correct answer)
- Due-on-sale clause
- Acceleration clause
Correct answer: Financing contingency clause
A financing contingency clause permits the buyer to withdraw without penalty if loan approval is not obtained by the deadline.
Question 5: Under Arkansas real estate law, which of the following is required for a valid land sale contract?
- Oral agreement witnessed by two people
- A written instrument signed by the party to be charged (Correct answer)
- A notarized document filed with the county clerk
- Approval from the Arkansas Real Estate Commission
Correct answer: A written instrument signed by the party to be charged
The Arkansas Statute of Frauds requires contracts for the sale of land to be in writing and signed by the party to be charged.
Question 6: What is the legal effect of an 'as-is' clause in an Arkansas residential real estate contract?
- It eliminates the seller's obligation to disclose known material defects
- It shifts repair responsibility to the buyer but does not waive disclosure duties (Correct answer)
- It voids all implied warranties including habitability
- It prevents the buyer from conducting any inspections
Correct answer: It shifts repair responsibility to the buyer but does not waive disclosure duties
An as-is clause means the seller will not make repairs, but Arkansas law still requires disclosure of known material defects.
Arkansas Real Estate License Arkansas Real Estate License Real Estate Contracts Questions and Answers 2
Under Arkansas law, what is the statute of limitations for filing a breach of contract claim related to a written real estate agreement?