Contracts, Finance, and Transfer Practice Question
Question
A buyer asks a licensee for an exam-focused explanation for the Tennessee Affiliate Broker Exam involving liquidated damages and agency and property condition disclosure practice. Which statement is the best answer? (Item 103)
Answer choices
- A. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
- B. The requirement matters only when the buyer obtains institutional financing.
- C. Identify pre-agreed damages provisions subject to applicable law in a way that fits Tennessee exam practice.
- D. The affiliated licensee may handle the matter independently without broker responsibility.
Correct Answer
C. Identify pre-agreed damages provisions subject to applicable law in a way that fits Tennessee exam practice.
Explanation
The correct answer is C because liquidated damages requires candidates to identify pre-agreed damages provisions subject to applicable law. The Tennessee reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: medium
- Domain: Contracts, Finance, and Transfer
- Objective: liquidated damages