ch7 Flashcards
To create a valid real estate contract, the acceptance of the written offer must be:
in writing, within the time specified in the offer, delivered to the offeror.
Under the statute of frauds, all real estate contracts must be in writing to be valid. If the offer is in writing, the acceptance must also be in writing, even in types of contracts not covered by the statute. An offer must be accepted within the time specified in the offer or it is void. Delivery of the acceptance is one of the elements of a valid contract.
A contract having no force or effect in law is:
void.
A contract that lacks an essential element is void and unenforceable.
A voluntary agreement between legally competent parties to do or not to do something is known as:
a contract.
Which of the following is NOT a required element for a contract to be valid?
Notarization
A contract does not have to be notarized to be valid.
A minor change in an offer by the offeree constitutes:
a counter offer.
Any change of terms to an offer by the offeree, no matter how minor, constitutes a counter offer and terminates the original offer.
The statute of frauds requires:
certain contracts are in writing.
Which of the following real estate documents are unilateral contracts?
Listing agreements.
Option contracts.
A unilateral contract is one in which only one party makes a promise certain. Both the listing agreement and an option contract are unilateral contracts.
A voidable contract is one that is:
enforceable, but is subject to rescission by one of the parties.
A voidable contract is one that is capable of being made void, wherein the injured party may either ratify the contract or cause it to be rescinded.
Which one of the following would terminate an offer?
A counter offer.
A counter offer terminates the original offer. An offer to purchase that has been accepted by the offeree cannot be terminated by the offeror without penalty. Earnest money is not an element of a valid contract; the consideration is the mutual promises of the parties; the offeror to purchase and the offeree to sell. The death of the offeree prior to recording will not terminate an accepted offer.
John and Mary have accepted an offer to purchase. John will be in Asia at the time of the closing, but wants to authorize Mary to sign their closing papers on his behalf. Which of the following should John give Mary?
A special power of attorney
A special power of attorney appoints a party (known as an attorney in fact) as an agent to perform any authorized actions pertaining to a particular event or transaction.
A written contract is:
an express contract.
When a contract is written or verbal, it is said to be an express contract.
When there is a breach of a purchase agreement, the predetermined amount for damages agreed to in advance is known as:
liquidated damages.
Liquidated damages are limited to the amount agreed to in the contract. They are specified and determined in advance.
The failure of one party to perform a duty under the terms of a contract is known as:
breach of contract.
lawsuit filed to compel a seller to convey real property to a buyer under the terms of a valid contract is known as a suit for:
specific performance.
A contract that has been fully performed by all of the parties is known as:
an executed contract.
A contract that has been fully performed is known as executed. Once formed, and until terminated, a contract is known as executory.
