Question

An INCORRECT statement concerning brokers generating contract forms by use of a computer is:

1) Blank spaces in the form may be filled in prior to negotiations between the principal parties of the transaction
2) Commission approved language must be reproduced exactly as is
3) Contract provisions developed for computer generated forms must be contained in a properly identified addendum and not within "Additional Provisions" unless they are transaction specific
4) There shall be software program security capability to prevent basic language from being inadvertently changed or deleted by the computer user in day to day operation

Answer 1

The incorrect statement is that custom provisions generated for computer forms must only be included in an addendum and not in 'Additional Provisions'. Transaction-specific provisions can be added directly to the 'Additional Provisions' section.

Step-by-step explanation:

An INCORRECT statement concerning brokers generating contract forms by use of a computer is that contract provisions developed for computer generated forms must be contained in a properly identified addendum and not within "Additional Provisions" unless they are transaction specific. This statement suggests that any custom provisions must be included in an addendum; however, it is common practice that transaction-specific provisions may be included in the "Additional Provisions" section of a contract. The contract generation process must ensure that commission approved language is precisely reproduced, and blank spaces can indeed be pre-filled prior to negotiations, provided they do not preemptively bind parties to specific terms without their agreement. Additionally, it is important for software used in generating these contracts to have security features preventing unintended alterations to the contract’s fundamental language.