Free Louisiana Contracts Practice Test — LicenseIQ

Question 1

Which event terminates a listing agreement by operation (force) of law?

Accepted Answer

Agency ends by performance, expiration, mutual agreement, or situationally by force of law (bankruptcy, condemnation), death or incapacity, destruction of the property, or breach.

Question 2

A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

Accepted Answer

RESPA prohibits kickbacks and unearned referral fees between settlement service providers and real estate licensees, even if disclosed.

Question 3

A broker asks a new salesperson to sign a non-compete agreement. Which provision would make it UNENFORCEABLE?

Accepted Answer

R.S. 37:1448.1 limits non-competes to two years, requires a three-business-day rescission right, and requires bold block lettering of at least ten-point type. Twelve-point type exceeds the minimum, and 18 months is within the cap.

Question 4

A contract clause stating that 'time is of the essence' means:

Accepted Answer

'Time is of the essence' makes performance by the stated dates essential; missing a deadline can be a breach.

Question 5

Under the statute of frauds, a real estate sales contract must be:

Accepted Answer

The statute of frauds requires real estate sales contracts to be in writing and signed to be enforceable.

Question 6

A contract that is missing an essential element, such as consideration, is:

Accepted Answer

Missing an essential element makes a contract void from the start. A voidable contract appears valid but may be canceled by one party.

Question 7

A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

Accepted Answer

At 95% LTV the down payment is 5% of price. Price = $18,000 / 0.05 = $360,000; loan = $342,000.

Question 8

A buyer's offer was accepted Wednesday. The seller delivered the disclosure Thursday at 2:00 p.m.; there are no holidays that week or the next. Until when may the buyer terminate under the Act?

Accepted Answer

Count 72 hours excluding weekends: Thursday 2 p.m. to Friday 2 p.m. = 24 hours; skip Saturday and Sunday; Friday 2 p.m. to midnight is 10 more hours (34 total), then the 24 hours of Monday (58 total) and 14 hours of Tuesday reach 72 at Tuesday 2 p.m. Sunday ignores the weekend exclusion.

Question 9

A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

Accepted Answer

Specific performance compels the breaching party to perform; it is available because land is unique. The buyer could alternatively seek monetary damages.

Question 10

A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

Accepted Answer

A general agent handles a range of matters in a continuing relationship (typical of property management). A listing agent is a special (limited) agent for one transaction.

Question 11

A contract signed by a 17-year-old buyer is generally:

Accepted Answer

Contracts with minors are voidable at the minor's option; the adult party remains bound. A contract with someone adjudged insane is void.

Question 12

Under R.S. 37:1448.1, how long does a licensee have to rescind a non-compete agreement?

Accepted Answer

The statute gives a rescission right until midnight of the third business day after signing or delivery. Seven calendar days is a distractor.

Question 13

Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Question 14

A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

Accepted Answer

Listing agents must present all offers through closing, but should not give legal advice about the seller's obligations under the existing contract.

Question 15

A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

Accepted Answer

In a unilateral contract only one party is bound (to pay if the act is performed); the other party has no obligation to act. Most real estate contracts are bilateral.

Question 16

A broker decides to disburse a disputed deposit based on a reasonable interpretation of the contract. What must happen first?

Accepted Answer

LAC 46:LXVII.2901(A)(2) permits disbursement on a reasonable interpretation only after 10 days' written notice to all parties and licensees. Mutual written consent is a different option.

Question 17

A broker begins working with a buyer to purchase a home. Under the 2024 buyer-agreement provisions, the broker must

Accepted Answer

R.S. 37:1448.4 requires a written buyer agreement for home purchases that states the broker's compensation or its method of calculation. Dual agency forms are needed only when one licensee represents both sides.

Question 18

A party making an offer to buy is the ____, and the party receiving it is the ____.

Accepted Answer

The offeror makes the offer; the offeree receives it. When a counteroffer is made, the roles swap.

Question 19

Under a land contract (contract for deed), during the payment period the buyer holds:

Accepted Answer

In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.

Question 20

A buyer's agent from another firm receives the earnest money check. The purchase agreement says nothing about who holds the deposit, and the parties have no other written agreement. The funds should go into

Accepted Answer

LAC 46:LXVII.2717 places funds in the appropriate account of the listing or managing broker unless all parties with an interest agree otherwise in writing.

Question 21

A home is co-owned by three siblings. Under the License Law, the listing agreement is valid only if

Accepted Answer

R.S. 37:1431 states a listing agreement is valid only if signed by all owners or their authorized attorney in fact. A majority is not enough.

Question 22

A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

Accepted Answer

The option binds only the optionor. The optionee may exercise or let it lapse (forfeiting the option money).

Question 23

To which transaction does the Louisiana buyer-agreement requirement NOT apply?

Accepted Answer

R.S. 37:1448.4 excludes leases of homes and non-home property. Each of the other choices is the purchase of a home.

Question 24

One of four co-owners of land held in indivision wants to sell only her undivided one-quarter share and gives the broker written consent. May the broker offer that share?

Accepted Answer

LAC 46:LXVII.2503(B) allows undivided property to be offered for sale or lease to the extent of the interest whose owner has given written consent. Selling the whole tract would still require all owners.

Question 25

Unless spouses choose otherwise by matrimonial agreement, Louisiana's legal matrimonial regime is the

Accepted Answer

The default legal regime is the community of acquets and gains, defined in arts. 2334 and 2338. Louisiana does not use tenancy by the entirety.

Louisiana real estate contracts practice test

1. Which event terminates a listing agreement by operation (force) of law?

2. A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

3. A broker asks a new salesperson to sign a non-compete agreement. Which provision would make it UNENFORCEABLE?

4. A contract clause stating that 'time is of the essence' means:

5. Under the statute of frauds, a real estate sales contract must be:

6. A contract that is missing an essential element, such as consideration, is:

7. A lender offers a 95% LTV loan. The buyer has $18,000 for the down payment. What is the maximum purchase price?

8. A buyer's offer was accepted Wednesday. The seller delivered the disclosure Thursday at 2:00 p.m.; there are no holidays that week or the next. Until when may the buyer terminate under the Act?

9. A seller refuses to close on a valid contract. Because each parcel of real estate is unique, the buyer may sue to force the sale through:

10. A property manager authorized to collect rents, sign leases, hire contractors and run the owner's buildings on an ongoing basis is typically a:

11. A contract signed by a 17-year-old buyer is generally:

12. Under R.S. 37:1448.1, how long does a licensee have to rescind a non-compete agreement?

13. Adding a new financing contingency to an existing sales contract is done by a(n) , while changing the existing closing date is done by a(n) .

14. A seller has already accepted an offer, and another buyer submits a higher offer. The listing agent should:

15. A seller says, 'I will pay any broker a 5% commission if they bring me a buyer.' This promise creates a(n):

16. A broker decides to disburse a disputed deposit based on a reasonable interpretation of the contract. What must happen first?

17. A broker begins working with a buyer to purchase a home. Under the 2024 buyer-agreement provisions, the broker must

18. A party making an offer to buy is the , and the party receiving it is the .

19. Under a land contract (contract for deed), during the payment period the buyer holds:

20. A buyer's agent from another firm receives the earnest money check. The purchase agreement says nothing about who holds the deposit, and the parties have no other written agreement. The funds should go into

21. A home is co-owned by three siblings. Under the License Law, the listing agreement is valid only if

22. A buyer pays $10,000 for a 12-month option to buy a house for $250,000. During the option period:

23. To which transaction does the Louisiana buyer-agreement requirement NOT apply?

24. One of four co-owners of land held in indivision wants to sell only her undivided one-quarter share and gives the broker written consent. May the broker offer that share?

25. Unless spouses choose otherwise by matrimonial agreement, Louisiana's legal matrimonial regime is the

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