Contracts and the Law Flashcards
Define contract
A contract is an agreement between two or more parties who, in a “meeting of the minds,” have pledged to perform or refrain from performing some act. A valid contract is one that is legally enforceable by virtue of meeting certain requirements of contract law.
All the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing. Which contract does this define?
Express Contract
Explain Bilateral Contract
A bilateral contract is one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party.
In a unilateral contract, there is only one promise. Where is this promise?
It is contained in the offer. The offer is accepted by performance of whatever is called for in the offer.
List the six essential elements of a valid contract.
Six Elements of a Valid Real Estate Contract include: Competent parties Consideration Mutual Agreement Lawful Objective In Writing and Signed by the Parties Contain a Legal Description
In terms of validity and enforceability, a court may construe the legal status of a contract in one of four ways. What are the four ways?
Valid
Valid but unenforceable
Void
Voidable
Define contractual consideration
Consideration is the exchange of promises offered by one party to another to do or not do something. Consideration separates contractual obligations from a gift. It is usually something of value being exchanged by one party to receive something of value from the other party.
Mutual assent is also referred to as what?
Mutual Agreement
Give one example of an unlawful term that would make a real estate contract or lease void.
A residential lease cannot be in violation of Fair Housing Laws. For instance, a lease stating that no children violates the familial status portion of federal fair housing by discriminating against families with children.
A real estate listing agreement cannot specify no showings to minorities, as this is discrimination and an illegal act. This would immediately void the agreement.
An apartment manager may not lease an efficiency apartment to a single mother with six children. This would violate health and safety occupancy limits.
The Statute of Frauds in Texas requires that all contracts affecting title to or interest in real estate be what?
In writing and signed by the parties. An oral agreement of sale is void and therefore unenforceable.
Name the two commonly used types of legal description in a real estate contract
Metes and bounds
Reference to a platted subdivision (lot, block, section, and subdivision name)
A negligent or wrongful act concerning a breach of duty rising out of law defines what?
A Tort
A contract terminates when fully executed by the parties. This is called what?
Performance
Parties to a contract can agree to terminate, or renounce, the contract. What is the term for this action?
Mutual Agreement
Explain Assignment of a Contract.
A real estate contract that is not a personal contract for services can be assigned to another party unless the terms of the agreement specifically prohibit assignment. Sales contracts are assignable because they involve the purchase of real property rather than a personal service.
Define Breach of Contract
A breach of contract is a failure to perform according to the terms of the agreement. Also called default, a breach of contract gives the damaged party the right to take legal action.
Contract
is an agreement between two or more parties who, in a “meeting of the minds,” have pledged to perform or refrain from performing some act. A valid contract is one that is legally enforceable by virtue of meeting certain requirements of contract law.
Express Contract
is one in which all the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing.
