Contracts, Finance, and Transfer Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Tennessee Affiliate Broker Exam involving contingencies and Tennessee Real Estate Commission. Which answer best reduces risk? (Item 61)
Answer choices
- A. Identify conditions that must be satisfied or waived before obligations become final in a way that fits Tennessee exam practice.
- B. The issue can be ignored if the parties want to close quickly.
- C. The rule applies only to commercial transactions and never to residential transactions.
- D. Client funds may be mixed with business funds if the broker reconciles the account later.
Correct Answer
A. Identify conditions that must be satisfied or waived before obligations become final in a way that fits Tennessee exam practice.
Explanation
The correct answer is A because contingencies requires candidates to identify conditions that must be satisfied or waived before obligations become final. 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: easy
- Domain: Contracts, Finance, and Transfer
- Objective: contingencies