Contracts, Transfer, and Escrow Practice Question

Question

A broker is supervising a transaction file involving title insurance. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 137)

Answer choices

1. A. Distinguish owner and lender title policy protection.
2. B. It is valid only when the buyer pays cash and no lender is involved.
3. C. It prevents any later disclosure, even when new facts become known.
4. D. It applies only to commercial property and never to residential transactions.

Correct Answer

A. Distinguish owner and lender title policy protection.

Explanation

The correct answer is A because title insurance requires candidates to distinguish owner and lender title policy protection. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.

Question details

• Difficulty: medium
• Domain: Contracts, Transfer, and Escrow
• Objective: title insurance

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