12 Real Estate Contracts

Question 1

Contract

Answer 1

A promise between two competent parties to perform or not perform some legal act in exchange for consideration

Question 2

A contract must be

Answer 2

Voluntary

Legally competent parties

Consideration something of value

For legal act

Question 3

Express and implied contracts

Answer 3

Express the party state the terms and show their intentions in words either oral or written

Implied contract the agreement of the parties is demonstrated by their acts and conduct

Question 4

Statute of fraud’s

Answer 4

State requiring certain contracts such as real estate sales or lease agreement to be in writing only a written agreement can be enforced in court of law

Question 5

Bilateral contract and unilateral contract

Answer 5

Bilateral two must have two promises one promises given in exchange for another

Unilateral contract is one sided one party makes a promise in order to entice a second party to do something

Question 6

Executed and executory contracts

Answer 6

And executed contract is one in which all parties have for filled their promise the contract has been performed

Executory contract exist when one or both parties still have an act to perform a sales contract is an executory contract from the time it is signed until closing ownership has not yet exchanged hands

Question 7

Elements of a contract

Answer 7

Offer and acceptance

Consideration

Legally competent parties

Consent

Legal purpose

Question 8

Validity of a contract

Answer 8

Valid- has all legal elements

Void- lax one or more elements and has no legal force or effect

Voidable- has all legal elements on its face but it may be rescinded or just disaffirmed

Unenforceable- appears to have all legal elements but cannot be enforced in court

Question 9

Time is of the essence

Answer 9

Means that each of the elements of the contract must be performed within the specified time a party who fails to perform and obligation under the contract on time is liable for a breach of contract

Question 10

Assignment

Novation

Answer 10

Assignment refers to a transfer of rights or duties under a contract. A substitution of parties

Novation is the substitution of a new contract

Question 11

Breach of contract

Answer 11

A violation of any of the terms or conditions of the contract

Question 12

Suit for specific performance

Answer 12

The buyer asked the court to force the seller to go through with the sale and transfer the property as previously agreed

Question 13

Liquidated damages

Answer 13

Clause in a real estate purchase contract specifies the amount of money to which the seller is entitled if the buyer breaches the contract

Question 14

Statue of limitations

Answer 14

The time during which parties to a contract may bring legal action lawsuit to enforce the rights the time depends on the state

Question 15

Rescission

Answer 15

Returns the parties to the original positions before the contract so any monies our property exchange must be returned

Question 16

Contingencies

Answer 16

Conditions that must be satisfied before A sales contract is fully enforceable

Mortgage contingency- protects the buyers earnest money in the event that the buyer is unable to secure a mortgage on the property

Inspection contingency-
Property sale contingency for text buyer from owning two homes at the same time also helps availability of cash for the purchase

Lienholder approval-if the contract is a short sale